Federal Reserve Chair Jerome Powell on Tuesday claimed he would’ve lowered interest rates if it weren’t for President Donald Trump’s tariffs.
Since his announcement of sweeping tariffs with all U.S. trade partners, Trump has been intensely focused on the interest rates of America’s treasury bonds. Not long after Trump revealed those tariffs, the interest rates saw sharp increases.
In response to those increases, Trump has demanded that Powell simply lower the interest rates. Despite a barrage of insults and threats to have him fired, Powell has stood firm and maintained the rates as is.
On Tuesday, Powell took part in a panel discussion at a economic forum in Portugal. When ask if he would’ve lowered rates if Trump hadn’t introduced the tariffs, he said:
So, I do think that’s right. In effect, 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. So, we didn’t overreact. In fact, we didn’t react at all. We’re simply taking some time. As long as the U.S. economy is in solid shape, we think the prudent thing to do is to wait and learn more and see what those effects might be.
Watch above via CNBC.
