Powell: Tariffs hinder The Federal Reserve (FED) from cutting interest rates, may start easing monetary policy in 2025.

On July 1st, at an event held by the European Central Bank in Portugal, Federal Reserve Chairman Powell stated that if it were not for President Trump's tariff policy, the Federal Reserve would have started cutting interest rates in 2025 and would currently adopt a more accommodative monetary policy. When asked if the uncertainty caused by the current tariff system of the U.S. government has led the Federal Reserve to delay interest rate cuts, Powell answered affirmatively, adding that due to the impact of the tariffs, nearly all predictions for U.S. inflation rates are rising significantly. Powell acknowledged that despite the increasing pressure from the U.S. government, the Federal Reserve is still in a mode of maintaining interest rates. He also stated that given the current instability of the economic outlook, the Federal Reserve is still watching the situation to gather more information.