If you’re hoping for lower interest rates on credit cards, car loans, or mortgages, you may have to wait longer. In a recent update to Congress, Federal Reserve Chair Jerome Powell said the central bank is not ready to cut rates just yet. The important announcement is part of the Fed’s ongoing efforts to manage inflation and the economy. Powell explained that he is closely watching inflation and government tariffs before making any decisions.
The news is important for everyone from regular consumers to big investors, as it affects borrowing, spending, and the job market. Here are the key takeaways from the daily news highlights update.
1. Powell’s Message: No Rush to Cut Interest Rates
Jerome Powell made it clear that the Federal Reserve is still cautious. It is keeping the federal funds rate high to ensure that inflation remains subdued. Inflation has eased since the pandemic, but that is not enough for the Fed to feel comfortable cutting rates.
Powell told Congress that the central bank will only take action once it fully understands how President Donald Trump’s tariff policies will affect prices. The tariffs could push up prices for everyday items again. Powell wants to avoid that, even though lower interest rates can boost the economy.
2. Trump Wants Rate Cuts—But Fed Says “Not Yet”
President Trump is pressuring the Fed to cut rates more quickly. He argues that inflation is already low and that lower rates will help the economy grow and reduce the government’s interest payments on the debt.
But the Federal Reserve is independent and does not follow the president’s orders. Powell has been adamant that his job is to do what is best for the economy. “It’s really important that we get it right,” he said. He added that his focus is not just on short-term politics but on long-term stability.
3. Tariffs May Increase Inflation Again
One of the biggest reasons the Fed is cautious is the risk that tariffs could push prices up again. President Trump has set new trade deadlines and could raise tariffs if other countries don’t lower their trade barriers.
Powell said that if these tariffs go up, they could increase costs for businesses and consumers. That could lead to a new wave of inflation. “Even small changes in prices can have big effects if people start to expect prices to rise,” Powell warned.
According to some experts, Powell may be indirectly telling the White House that his trade decisions are fueling inflation and making it harder to cut rates.
4. Some Fed Members Support Rate Cuts—But Not All
Not everyone at the Federal Reserve agrees with Powell. Two other Fed leaders, Christopher Waller and Michelle Bowman, recently said they are ready to cut interest rates soon, possibly as early as July.
Powell did not rule out a rate cut himself but said there was no need to rush. He said the economy was still strong, and the job market was solid. But he also said that if inflation remained low, the Fed could cut rates “rather quickly.”
For now, the central bank will wait and see. Powell reminded everyone that the Fed has two main goals: keeping inflation low and supporting jobs.
Fed Holds Rates Awaiting Clarity
This breaking news story highlights the uncertainty in today’s economy. People are hoping for relief from high borrowing costs, but the Federal Reserve is remaining cautious. Trade policies, inflation, and job numbers will continue to shape the Fed’s next move.
For now, the message is clear: Interest rates will remain high until more clarity is provided on tariffs and inflation. The Fed’s next policy meeting in July will be closely watched.
Stay tuned for more daily news highlights as this important story continues to develop.
