Powell Defends Rate Caution
Fed Chair Powell reiterated the need to wait and see how tariffs impact inflation, noting uncertainty around the passthrough of tariff-induced inflation while also rejecting stagflation as the "base case".
Daily Updates:
In his second day of testimony at Capitol Hill, Federal Reserve Chair Jerome Powell, once more hammered home his justification for moving slow in adjusting the benchmark federal funds rate.
“The question is who’s going to pay for the tariffs. Originally it's the importer but it gets passed along through the distribution chain to some extent to the consumer. The ultimate question of it is how much does show up in inflation, and honestly it’s very hard to predict that in advance. So we’re watching to see what shows up in measured inflation”.