Powell: Tariffs Drive Inflation, Fed Cuts Rates, Firm on 2% Target

• Fed Chair Jerome Powell stated that current inflation is largely driven by tariffs, not broad-based factors.
• The Federal Reserve remains committed to bringing inflation back to its 2% target.
• Powell acknowledged a complicated economic landscape with rising labor-market risks and public frustration over high living costs.
• The Fed recently cut its benchmark interest rate by 25 basis points, bringing it to 3.5-3.75%, its lowest since 2022.
• The central bank aims to restore price stability and support income gains, ensuring real compensation is significantly positive.

Why It Matters: Tariffs largely drive inflation, influencing Fed policy and your finances.