Federal Reserve officials are prepared to hold their policy rate steady to minimize the risk that President Donald Trump’s tariffs trigger a persistent rise in inflation, even if the labor market softens further.
Federal Reserve Governor Michelle Bowman said the neutral level for the central bank’s policy rate had likely risen since the Covid-19 pandemic.
Chair Jerome Powell said the time has come for the Federal Reserve to cut its key policy rate, affirming expectations that officials will begin lowering borrowing costs next month and making clear his intention to prevent further cooling in the labor market.
