Federal Reserve Chair Jerome Powell indicated that he would have lowered interest rates if not for President Trump's tariffs. The implementation of these tariffs led to significant increases in interest rates. Trump has been vocal in his demand for lowered rates, despite Powell facing insults and threats of dismissal. During a panel discussion in Portugal, Powell confirmed that the tariffs prompted a wait-and-see approach rather than an immediate reaction, believing that the current state of the U.S. economy warranted caution.
So, I do think that's right. In effect, 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. So, we didn't overreact. In fact, we didn't react at all.
As long as the U.S. economy is in solid shape, we think the prudent thing to do is to wait and learn more and see what those effects might be.
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