Part 7/10:
Chair Jerome Powell expressed concerns about inflation, linking tariffs and trade tensions to potential inflationary pressures. Critics argue that tariffs are unlikely to directly cause inflation since they don't expand the money supply but may selectively affect certain product prices. Some interpret Powell's stance as a subtle challenge to Trump’s trade policies, suggesting that Powell might be reluctant to support further monetary easing under current conditions.
Despite this tension, analysts anticipate that the Fed will eventually cut interest rates before the year's end to support economic growth, indicating a possible divergence between monetary policy and trade policy signals.