Powell: If tariff-driven inflation this year eases, it would show we can ease policy

BlockBeats News, January 29, Federal Reserve Chairman Powell: Has no intention to lay out specific criteria for when to cut interest rates again. Risks on both sides of the dual mandate have somewhat diminished, and there are differing views within the Committee on how to balance these risks.

It is expected that the impact of tariffs on goods will peak this year and then decline. If we see this (tariff-driven inflation peak and fall back), it would suggest that we can ease policy.

Short-term inflation expectations have fully receded, which is very reassuring. Longer-term inflation expectations reflect confidence in inflation returning to 2% (FX678).