Federal Reserve Chair Jerome Powell told a financial conference in Portugal on Tuesday that he would have lowered interest rates if not for President Trump’s tariffs. The White House all-but directly asked the Fed to lower rates yesterday, with Trump reportedly sending a note to Powell that read: “Jerome, you are as usual too late. You have cost the USA a fortune and continue to do so. You should lower the rate by a lot. Hundreds of billions of dollars are being lost, and there is no inflation.”

JEROME POWELL: I guess I would start, if I may, by saying that the U.S. economy is in a pretty good position. Inflation has come down close to 2%. We’re at 2.3% headline, 2.7% core. The unemployment rate is at 4.2%, so we’re healthy overall. If you look-ignore the tariffs for a second-inflation is behaving pretty much exactly as we have expected and hoped that it would. We haven’t seen effects much yet from tariffs, and we didn’t expect to by now. We’ve always said that the timing, amount, and persistence of the inflation would be highly uncertain, and it’s certainly proved that. So we’re watching. We expect to see over the summer some readings-higher readings-but we’re prepared to learn that it can be higher or lower or later or sooner than we’d expected. HOST: Chair, would the Fed have cut more by now if it weren’t for the tariffs? JEROME POWELL: So I do think that-I think that’s right. We’re 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. And again, they haven’t really shown up. And, you know, so for now, we’re waiting.

Here is the full event where Powell was joined by economic leaders from the European Union, Japan, South Korea and the United Kingdom:
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