#FedRateCutPrediction

Federal Reserve Chairman Jerome Powell, in a press conference following the latest interest rate decision, emphasized their commitment to bringing inflation down to 2%. Powell stated that the current increase in inflation is largely due to tariffs, saying, "We are committed to reaching 2% inflation, and we will achieve it." The meeting, where the Fed lowered its key interest rate by a quarter point to the 4.25-4.50% range, is considered a critical step before the end of the year.
Powell's statements indicate that the aggressive tariff policies implemented globally by the Trump administration are increasing inflationary pressure. "The current increase in inflation is largely due to tariffs," Powell said, adding that the labor market is gradually cooling and inflation is still somewhat high. He stated that they expect the year-end unemployment rate to be around 4.5%, and added that he is optimistic that tariff-induced inflation will not spread to the broader economy.
The Fed's decision is based on limited data due to the federal government shutdown in the fall delaying data collection. Powell acknowledged that tight housing supply could limit the impact of interest rate cuts, but stressed that they would provide some relief for borrowers. The meeting took place amid tensions between the Fed and the Trump administration, with Powell reiterating his commitment to keeping inflation low. Experts interpret Powell's reference to tariffs as an attempt to draw attention to external factors beyond the Fed's monetary policy tools. Markets will closely monitor how tariff policies affect inflation dynamics in the coming period. The Fed's next meeting is scheduled for January 2026.