Federal Reserve Chair Powell: Real economy strong, can patiently deal with trade uncertainty.

Adriana Kugler, a member of the Federal Reserve Board, stated that the current Fed should maintain stable interest rates, both because the US real economy still appears strong and also to be wary of the uncertainty brought by Trump's tariff policies. She said in an interview, "The fundamentals of the real economy are healthy, which gives us more time - to ensure that inflation continues to fall, and to avoid significant market fluctuations." This week, the Fed's monetary policy meeting decided to keep interest rates unchanged and signaled that concerns about "repeated inflation" and "rising unemployment" have increased. Fed Chairman Powell emphasized after the meeting that the central bank will not adjust interest rate policy hastily. This stance, in line with Kugler's remarks, highlights the Fed's cautious attitude in balancing economic growth and price stability. Kugler specifically mentioned the latest GDP data: influenced by Trump's new tariff policy, American companies and consumers concentrated their purchases before the tariffs took effect, leading to the first quarterly economic contraction since 2022. She warned, "After the pre-purchase rush, future consumer spending may face downward pressure." However, she also pointed out that aside from tariff disruptions, core indicators such as the job market and residents' income still show resilience in the economy. The current market is focused on two key variables: the timing and actual impact of the Trump administration's tariff policy, and whether the Fed will adjust its policy path in response to economic data fluctuations. Kugler's comments suggest that until the tariff risks are completely clear, the Fed may continue its "wait-and-see" strategy, avoiding premature interest rate cuts that could trigger inflation rebound while also preventing excessively high interest rates from exacerbating downward pressure on the economy.