Federal Reserve Chair Jerome Powell didn’t rule out an interest rate reduction this month but agreed that the central bank would have cut rates by now if not for the tariffs introduced by the Trump administration.
"I wouldn't take any meeting off the table or put it directly on the table," Powell said on a panel at a European Central Bank monetary policy conference in Portugal, when asked about the possibility of a cut in July. "It's going to depend on how the data evolved."
Powell noted a “solid majority” of the Fed’s interest rate setting committee do expect that it will become appropriate later this year to begin to lower rates again, explicitly mentioning the remaining four meetings of the year. That includes a gathering on July 29-30.
He was also asked by the panel moderator if the US central bank would have cut more by now if not for tariffs. The Fed lowered rates by a full percentage point in 2024 but has held rates steady so far in 2025.
“So I do think that — I think that's right,” he said, noting that “we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs.”
Read more: What Trump's tariffs mean for the economy and your wallet
Federal Reserve Chairman Jerome Powell listens during an open meeting of the Fed Board of Governors on June 25. (AP Photo/Mark Schiefelbein) · ASSOCIATED PRESS “We think the prudent thing to do is to wait and learn more and see what those effects might be.”
Powell reiterated that the Fed has not seen much effect yet from tariffs, noting that the central bank expects to see some “higher readings” on inflation but that officials are prepared to learn and that inflation could be higher, lower, later, or sooner than expected.
His comments come as the chairman and the Fed face intensifying pressure from President Trump to lower rates.
On Monday, Trump used Truth Social to publish a note the president sent to Powell that showed a list of the central banks around the world with lower interest rates than the US.
"Jerome — You are, as usual, 'Too Late'," the note from Trump read, telling Powell that he has "cost the USA a fortune" and urging him to "lower The Rate — by a lot!"
Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments
White House Press Secretary Karoline Leavitt holds up a hand-written note by President Donald Trump to Jerome Powell during a press briefing at the White House on June 30. (Photo by Ricky Carioti/The Washington Post via Getty Images) · The Washington Post via Getty Images Trump on Truth Social also widened his criticism to the entire Fed board: "The Board just sits there and watches, so they are equally to blame."
When asked Tuesday on stage in Portugal if Trump's attacks made it more difficult for Powell to do his job, he said, "I'm very focused on just doing my job" and added that "the things that matter are using our tools to achieve the goals that Congress has given us — maximum employment, price stability, financial stability — and that's what we focus on 100%."
Story ContinuesPowell’s response was met with applause from other participants on the panel and the audience in the room.
European Central Bank head Christine Lagarde was then asked if she would do the same thing if she were in the same position.
"I think I speak for my colleagues on this panel when I say I would do exactly the same thing that Jay Powell does," Lagarde said.
Powell has roughly 10 months left in his term as chair. He said on Tuesday, “I want to hand over to my successor an economy in good shape. That’s what keeps me awake at night.”
He was also asked if he would serve out his term as a Fed governor until 2028. “I have nothing for you on that today." he said.
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