Powell: The impact of tariffs on inflation remains to be seen.

Federal Reserve Chairman Powell said that the Fed can maintain stable interest rates while waiting to see if tariff policies will push up inflation. "Higher tariffs have begun to show more clearly in the prices of some goods, but their overall impact on economic activity and inflation remains to be seen," Powell said. He suggested that a "reasonable baseline" may be that the impact of tariffs on inflation will be "temporary". However, he also warned that tariffs could lead to inflation changes that are "more persistent". "Our responsibility is to maintain long-term... stable inflation expectations and prevent a one-time rise in prices from turning into a sustained inflation problem," Powell added. "Currently, we are in a favorable position to understand the possible direction of the economy and the evolving risk balance more before adjusting our policy stance. We believe that the current policy stance is appropriate to guard against inflation risks."