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Powell tells House Financial Services Committee Fed sees tariffs as an uncertain inflation risk; waits for data before cutting rates
Summary
Federal Reserve Chair Jerome Powell told the House Financial Services Committee the U.S. economy remains "solid," unemployment is low and inflation has eased but remains above the Fed's 2% goal. He said tariffs are likely to push up prices but the size and persistence of that effect remain uncertain; the FOMC will watch incoming data before changing the federal funds rate.
Federal Reserve Chair Jerome Powell told the House Financial Services Committee that the U.S. economy remains "solid" with low unemployment but that the committee is monitoring an uncertain inflation path driven in part by recent tariff actions.
Powell said inflation has come down from its 2022 highs—personal consumption expenditures (PCE) prices rose about 2.3% year-over-year through May and core PCE excluding food and energy rose about 2.6%—but remains above the Fed's 2% longer-run objective. He said payroll job gains averaged about 224,000 per month in the first five months of the year and the unemployment rate was 4.2% in May.
The chair emphasized the committee's dual mandate of maximum employment and price stability and…
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