Federal Reserve Chair Jerome Powell didn’t rule out cutting interest rates this month, but he conceded that, without the tariffs imposed by the Trump administration, the central bank likely would have already eased policy.
“I wouldn’t take any meeting off the table or put it directly on the table,” Powell told CNBC’s Jim Cramer at a European Central Bank policy conference in Portugal, when asked about a potential July rate cut. “It’s going to depend on how the data evolved.”
Powell stated that a “solid majority” of the Fed’s rate-setting committee believe it will be appropriate to begin reducing rates later this year, pointing specifically to the four remaining meetings, including one scheduled for July 29–30.
Asked whether the Fed would have cut rates sooner if not for tariffs, Powell agreed. He noted that while the Fed did cut rates by a full percentage point in 2024, it has kept them unchanged in 2025.
“So I do think that — I think that’s right,” he said. “We went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs.”
“We think the prudent thing to do is to wait and learn more and see what those effects might be.”
Powell emphasized that the Fed has not yet seen a major impact from tariffs, although officials expect “higher readings” on inflation. He cautioned that inflation could prove “higher, lower, later, or sooner than expected.”
His remarks come as the Fed faces mounting pressure from President Trump to start cutting rates.
On Monday, Trump posted a note to Powell on Truth Social, comparing U.S. rates unfavorably to those of other countries.
“Jerome — You are, as usual, ‘Too Late’,” the note read, accusing Powell of having “cost the USA a fortune” and urging him to “lower The Rate — by a lot!”
Trump also criticized the entire Fed board: “The Board just sits there and watches, so they are equally to blame.”
When asked in Portugal if Trump’s criticism affected his work, Powell replied, “I’m very focused on just doing my job”, and added, “the things that matter are using our tools to achieve the goals that Congress has given us — maximum employment, price stability, financial stability — and that’s what we focus on 100%.” His answer drew applause from the audience.
ECB President Christine Lagarde was then asked if she would respond similarly. “I think I speak for my colleagues on this panel when I say I would do exactly the same thing that Jay Powell does,” she said.
With around 10 months left in his term, Powell remarked, “I want to hand over to my successor an economy in good shape. That’s what keeps me awake at night.”
When queried about staying on as a Fed governor through 2028, he replied, “I have nothing for you on that today.”
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