Jerome Powell, Chair of the Federal Reserve (Fed), stated on Dec. 1 (local time) that the benchmark interest rate would have been lower than its current level if not for the tariff policy of the Donald Trump administration.
On the same day, Powell made this remark at the Central Bank policy forum hosted by the European Central Bank (ECB) in Sintra, Portugal. When asked by the moderator, "Do you think there would have been more rate cuts if it weren't for the tariff?" he replied, "I think so." He added, "Seeing the scale of the tariffs and the significantly raised inflation outlook as a result of the tariffs, I decided to hold off on the rate cuts."
Powell clarified that the Fed did not overreact to the tariffs, stating, "As long as the U.S. economy remains in solid shape, I thought waiting to observe the tariff impacts was a prudent choice."
Powell noted that the impact of the tariffs on the U.S. economy has not yet fully materialized, explaining, "The timing, scale, and duration of tariffs affecting inflation are uncertain."
When asked if he faced added difficulty in his duties due to pressure from President Trump to cut interest rates, Powell replied, "I’m just focused on my job." He emphasized, "I am concentrating on maximizing employment, maintaining price stability, and ensuring financial stability, which are the goals assigned to us by Congress."