Expectation of additional inflation increase due to tariffs, says Fed Chair Powell

Job Market Dynamics - The job market is currently weakening due to a significant reduction in the supply of new workers, driven by declining labor force participation and reduced immigration policies [1][2] - Labor demand has also decreased, leading to a situation where the unemployment rate has fallen, indicating that demand for workers has declined more than supply [2][3] - The current job creation rate is close to zero, suggesting a delicate balance in the labor market where maximum employment is not sustainable [3][4] Monetary Policy Response - The company has reacted to the job market situation by supporting demand through rate reductions, making rates less tight than before, which is expected to prevent further deterioration of the labor market [4][5] - There is a debate on whether the supply-side issues can be effectively addressed with monetary tools, but some argue that demand-side support is necessary [5] Inflation and Tariffs - Expectations indicate that inflation will continue to rise due to tariffs, which take time to impact the production chain and reach consumers [6][7] - The projected inflation rate is around 2.8%, with potential increases of two to four tenths due to tariffs, but these are considered modest overall [7][8] - Once all tariffs are implemented, prices may stabilize at a higher level, leading to a decrease in measured inflation back to non-tariff levels [9][10] Consumer Sentiment - Consumers remain dissatisfied with inflation, largely due to the higher prices experienced in previous years, despite current inflation rates not rising as quickly [10][11] - The lingering effects of past inflation are contributing to public unhappiness, and it may take time for real incomes to rise and improve consumer sentiment [11]