Powell’s Caution on Tariff-Driven Inflation Is Right
Trump has dubbed the central bank chair “Too Late,” but the data proves otherwise.
Right on time.
Photographer: Al Drago/Bloomberg
President Donald Trump has taken to routinely maligning Federal Reserve Chair Jerome Powell as “too late” because interest rates have been on hold at 4.25%-4.5% since he took office. On Tuesday alone, he characteristically took to social media to demand three percentage points of rate cuts — something that is never going to happen outside of a recession. Trump’s needling aside, the latest inflation data show that Powell’s wait-and-see approach is the exact right tack for today’s economic outlook.
The Bureau of Labor Statistics said Tuesday that the core consumer price index rose 0.2% in June from a month earlier, a slightly encouraging surprise that leaves the year-over-year rate at 2.9%. But the reading remains well above the Fed’s 2% target1, and the details of the report show that tariffs are starting to fan higher prices and that larger effects might start to feed through over the next couple of months.