ISTANBUL
US Federal Reserve Chair Jerome Powell said Tuesday that they are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to the policy stance of the central bank.
"Policy changes continue to evolve, and their effects on the economy remain uncertain," Powell said in his speech at the Semiannual Monetary Policy Report to the Congress.
He stated that the effects of tariffs will depend on their final level, among other things.
"Expectations of that level, and thus of the related economic effects, reached a peak in April and have since declined," Powell said.
Still, he said, increases in tariffs this year are likely to push up prices and weigh on economic activity.
“The FOMC's 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,” Powell said, noting that the effects on inflation could be short-lived or more persistent.
He emphasized that they will balance the goals of maximum employment and price stability while taking action to fulfill this obligation.
"For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance," Powell said.
The Federal Reserve kept the policy rate unchanged at the target range of 4.25% - 4.50% last week, in line with expectations.
In the policy rate decision statement, the central bank warned that uncertainty about the economic outlook has diminished but remains elevated.
The central bank kept the rate at the historically high level of 5.5% from July 2023 to September 2024, before gradually lowering it to 4.5%.
The Fed also kept its forecast of the year-end policy rate at 3.9%, indicating that it still considers two rate cuts this year.