Federal Reserve Chair Jerome Powell on Tuesday reiterated the central bank plans to «wait and learn more» about the impact of tariffs on inflation before lowering interest rates, again setting aside President Trump’s demands for immediate and deep rate cuts.
Federal Reserve Chair Jerome Powell ramped up his war of words with President Donald Trump on Tuesday, blaming the commander-in-chief’s tariffs for holding up interest rate cuts.
Powell told a central banking conference in Portugal that the looming threat of a global trade war had slammed the brakes on plans to slash the key rate of borrowing that impacts what ordinary Americans pay on their home loans or credit cards.
“We went on hold when we saw the size of the tariffs. All inflation forecasts for the United States went up materially as a consequence,” he said during a panel organized by the European Central Bank.
He was speaking in the upmarket hillside resort of Sintra, which was once a summer retreat for Portuguese nobility and royalty.
Powell’s remarks are likely to further anger Trump, who has repeatedly hit out at America’s central banker for pausing rate cuts that started last year.
On Monday, the president sent Powell a handwritten note that he also posted on Truth Social, arguing the Fed board “should be ashamed” for not lowering rates and pointing out many other economies had slashed borrowing costs.
In April, Trump announced his so-called Liberation Day tariffs on dozens of countries, using a new calculation based on trade deficits.
