#FedRateCutPrediction

Federal Reserve Chair Jerome Powell emphasized their commitment to lowering inflation to 2% at the post-decision press conference following the latest interest rate announcement. Powell stated that the recent rise in inflation is largely due to tariffs, saying, “We are committed to achieving a 2% inflation target, and we will accomplish it.” In this meeting, the Federal Reserve lowered the key interest rate by 0.25 percentage points to a range of 4.25-4.50%, which is considered an important step before the end of the year.
Powell's remarks indicate that the aggressive tariffs implemented by the Trump administration globally are increasing inflationary pressures. “The current rise in inflation is mainly caused by tariffs,” Powell said, adding that the labor market is gradually cooling and inflation remains somewhat elevated. He expects the unemployment rate to be around 4.5% by the end of the year and expressed optimism that inflation triggered by tariffs will not spread to the broader economy.
Due to the delayed data collection caused by the fall government shutdown, the Fed's decision was based on limited data. Powell acknowledged that tight housing supply might limit the effectiveness of rate cuts but emphasized that they will provide some relief for borrowers. The meeting was held against the backdrop of tense relations between the Fed and the Trump administration, with Powell reaffirming his commitment to keep inflation low. Experts interpret Powell's mention of tariffs as an attempt to draw attention to external factors beyond the scope of the Fed's monetary policy tools. Markets will closely monitor how future tariff policies influence inflation dynamics. The next Federal Reserve meeting is scheduled for January 2026.