Core Viewpoint - Federal Reserve Chairman Jerome Powell indicated that if it were not for the tariffs imposed by former President Trump, the Fed would likely have already implemented interest rate cuts [3][4]. Group 1: Interest Rate Policy - Powell stated that the decision to maintain the current interest rates was influenced by the significant rise in inflation expectations due to tariffs [3]. - The Fed has kept the key borrowing rate unchanged in the range of 4.25% to 4.5% since December of the previous year [3]. - The Federal Open Market Committee (FOMC) projects two potential rate cuts by the end of 2025, but Powell emphasized a cautious approach, stating that decisions will depend on evolving data [3][4]. Group 2: Economic Data and Inflation - The Fed is currently in a challenging position, balancing its inflation forecasts against recent data that has not shown significant inflationary pressure [6]. - Powell mentioned that the most prudent approach is to remain patient and observe how the impacts of tariffs will manifest in inflation data over the coming months [7]. - Despite the pressures from the Trump administration, the Fed has refrained from cutting rates this year, as the anticipated inflation from tariffs has not yet materialized [6][8]. Group 3: Market Expectations - According to the CME FedWatch tool, there is over a 76% probability that the Fed will maintain interest rates in July [4]. - Powell acknowledged the uncertainty surrounding the timing, magnitude, and persistence of inflation, which complicates the Fed's decision-making process [9]. - Some Fed officials, appointed by Trump, have suggested that a rate cut could occur as soon as the upcoming meeting, citing recent moderate economic data as supportive of this view [9].

Group 1 - Federal Reserve Chairman Powell indicated that inflation is performing as expected, with an anticipated rise in summer inflation data and a gradual cooling of the labor market [1] - The Federal Reserve decided to maintain interest rates in June, but there is a divergence among officials regarding future rate paths, with 10 decision-makers expecting at least two rate cuts this year [1] - Powell emphasized the need to observe summer data before making decisions, acknowledging the uncertainty surrounding tariff impacts on inflation [1] Group 2 - Despite pressure from Trump for rate cuts, the Federal Reserve has not yet lowered rates this year, primarily to assess whether tariff-induced price increases will lead to persistent inflation [2] - European Central Bank President Lagarde stated that while the mission is not complete, the goals have been achieved, and the ECB is prepared to address complex economic situations [2] - Bank of England Governor Bailey noted that the direction of interest rates is downward, attributing current inflation to administrative pricing factors amid signs of economic and labor market weakness [2]