Trump tariffs halted Fed rate cuts, US employment decline needed for policy easing
US Federal Reserve Chair Jerome Powell reiterated that the Fed was on course to make more rate cuts this year, before President Trump’s sweeping tariffs.
Speaking at the ECB Forum in Portugal, Powell stated, “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.”
Despite introducing tariffs, which have resulted in rising inflation, President Trump has been vocal about his displeasure with the Fed’s decision to maintain its policy.
The central bank continues to use economic data as its main indicator, with tomorrow’s non-farm payrolls of utmost importance.
It is expected that the NFP number will be 110k, down from 139k in May and 147k in April. Despite these declines, the Fed is seeking more substantial declines in job growth before considering cuts.
GBPUSD snapped an 8-day bull run on the news; however, the Dollar Index remains at its lowest level since February.
Author
Eliman Dambell
Sayvio AI
With over a decade in financial markets, Eliman brings an experienced and diversified point of view to market analysis. He covers current and historical macro trends to give insights on Metals, FX, Stocks, and Crypto.
