Powell Says Tariff Costs to Consumers ‘Later and Less’ Than Expected

Inflation Risks - Near-term inflation risks are tilted to the upside, presenting a challenging economic situation [1] - Tariffs' impact on inflation has been modest, with retailers and importers absorbing costs rather than passing them to consumers [3] - The pass-through of tariff costs to consumers has been slower and less significant than expected, creating uncertainty about future inflation trends [4] Labor Market - Employment risks are tilted to the downside, indicating potential challenges in the labor market [1] - The labor market exhibits weakness with low job creation, although the unemployment rate and quits rate remain low [5] - The labor market has reached an unusual stability characterized by lower demand and supply for workers, posing a downside risk [6] Revenue Collection - The federal government is collecting substantial revenue, estimated at a pace of 300 to 400 billion USD per year [1] - The source of tariff payments is uncertain, with potential candidates including foreign exporters, domestic companies, retailers, or end consumers [2] Monetary Policy - The responsible approach involves monitoring and waiting to avoid making mistakes on inflation [5] - Inflation control is a key mandate, requiring careful observation of economic developments [4]