Federal Reserve Chair Jerome Powell has stated that while no immediate rate cuts are planned, 2025 could see changes if economic conditions shift. His comments came during a session before the House Financial Services Committee, where he discussed inflation, tariffs, and the central bank’s cautious outlook.

Jerome Powell Outlines Data-Driven Rate Strategy

Jerome Powell emphasized the Federal Reserve’s reliance on upcoming economic data. He said the central bank is not considering a rate cut at its next meeting. However, he left open the possibility of adjustments in 2025, depending on inflation performance and other macroeconomic indicators.

POWELL: REASON WE ARE NOT CUTTING RATES IS THAT FORECASTS IN AND OUT OF FED EXPECT MEANINGFUL INCREASE IN INFLATION THIS YEAR

— *Walter Bloomberg (@DeItaone) June 24, 2025

“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 stated during the hearing.

He explained that June and July inflation data would be closely analyzed, particularly due to concerns over the effects of tariffs. The Fed needs to determine how these tariffs may affect pricing pressures before changing its interest rate policy.

Tariff Effects Could Influence Rate Decisions

Powell addressed how tariffs could influence inflation in the coming months. He stated that the central bank requires more data to determine whether tariffs are contributing to higher consumer prices.

It will not be long before the data indicates how inflation has affected matters, and decisions will be made about cutting the rates, Powell observed. He was saying that there is a potential that inflation could increase this year, but it is possible that the effects of tariffs can be less problematic than anticipated, hence the Fed remains open to this scenario as well.

The Fed does not adopt a political position towards tariff policies. It links instead with economic indicators and their interaction with the monetary policy targets including price stability and employment.

US Dollar Stability Maintains Global Confidence

Nevertheless, although the issue of a fiscal policy and inflation continues to prevail, Powell ascertained the belief in the U.S. dollar once again. Asked how it would respond to its position as global reserve currency, he responded by stating that there was no sign that the dollar was losing its status.

Market watchers are worrying at these tales of decline before the age, Powell said. “These tales of decline are premature and somewhat overdone.” He also stated that the volatility in U.S. Treasury markets in April did not impact the dollar’s international credibility.

He noted that while other countries are exploring alternative settlement systems, the dollar remains central to global trade and financial markets.

Peter Schiff Warns of Deepening Economic Risks

Economist Peter Schiff responded to Powell’s comments with criticism of past monetary policy. Schiff argued that the Fed’s low interest rates over the past decade have fueled current inflation trends.

“All of the inflation chickens that the Fed has been releasing for more than a decade are coming home to roost,” Schiff said. He rejected tariffs as the main problem and pointed the finger at prolonged monetary easing, which is supposed to be the cause behind its current economic frailty.

Schiff cautioned that America will plunge into a recession coupled with increasing inflation levels. He denoted this situation as a potential step to stagflation or even worse case on future policy actions.