Federal Reserve chairman Jerome Powell said on Wednesday that Fed policymakers expect inflation in goods prices to go up over the course of the summer as the impact of US president Donald Trump’s tariffs work their way to US consumers.
“We’ve had goods inflation just moving up a bit,” Mr Powell told a news conference after the Fed held rates unchanged.
“We do expect to see more of that over the course of the summer.”
Mr Powell said it takes time for tariffs to work through the goods chain of distribution, noting many goods being sold by retailers were imported months before tariffs were imposed.
“So we’re beginning to see some effects, and we do expect to see more of them over coming months,” he said.
“We do also see price increases in some of the relevant categories, like personal computers and audio visual equipment and things like that attributable to tariff increases.”
Mr Trump had earlier called for a huge reduction in US interest rates and asked whether he can “appoint myself” at the Federal Reserve, just hours before the central bank was due to release its latest policy decision.
“We should be two points lower, it would be nice to be 2½ points lower,” the US president said at the White House on Wednesday morning.
Mr Trump added: “Am I allowed to appoint myself at the Fed? I’d do a much better job than these people.”
The latest salvo against the Fed and its chairman, who he on Wednesday called “stupid”, came as policymakers held interest rates steady at the end of their two-day meeting.
The Fed cut rates by one percentage point last year, but has held them steady in 2025 as they assess how Mr Trump’s tariffs will affect inflation and growth.
The US president has said that he will not fire Mr Powell, whose term ends next May. The US supreme court has signalled that it believes the executive branch does not have the legal right to fire Fed governors. – Copyright The Financial Times Limited/Reuters
