ISTANBUL 

US Federal Reserve Chair Jerome Powell said on Wednesday that the Fed may keep the policy rate constant while waiting to see if tariffs drive inflation, as the central bank left the policy rate unchanged again.

Powell said they have made no decision for the September meeting. "We don't do that in advance. We will be taking that information into consideration and all the other information we get," the chair said in a press conference after the Fed interest rate decision.

Powell said they believe that the current stance of monetary policy leaves the central bank well positioned to respond in a timely way to potential economic developments.

He said the Fed wants to be sure that President Donald Trump’s tariffs would not cause an uptick in inflation before cutting rates.

"A reasonable base case is that the effects on inflation could be short lived, reflecting a one-time shift in the price level, but it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed," the Fed chair said.

Powell reaffirmed the central bank’s commitment to a "moderately restrictive" policy stance. “Our obligation is to keep longer term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” he added.

The consumer inflation in the US rose 2.7% year-on-year in June, above estimates of 2.6%.

"Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen," Powell said.

In response to a question about the recent trade deals between the US and several trading partners, Powell said it's been a very "dynamic" time for the trade negotiations, and lots of events in the intermeeting period.

"But we are still a ways of seeing where things settle down. We are getting clearly more and more information and I think at this point people's estimates, our estimates, outside estimates of the effective level of tariffs is not moving around that much at this point," he said.

However, at the same time, Powell said, there are many uncertainties left to resolve.

The remarks followed the Fed's decision Wednesday to hold the federal funds rate constant at the 4.25%-4.50% range, despite President Donald Trump's repeated calls to cut rates.

The central bank said in a statement that the economic activity growth moderated in the first half of the year, although swings in net exports continue to affect the data.

About the recent building renovation controversy and Trump's visit to the renovated buildings in the Fed's Washington headquarters, Powell said it was a “nice visit."

“We had a nice visit with the president. It was an honor to host him. It’s not something that happens very often at the Federal Reserve to have the president come over, let alone to visit a building, but it was a good visit,” he said.

Asked if the Trump administration's criticism about the renovations is linked to Trump's rate cut demands, Powell said: "It’s not for me to say.”