PANews reported on January 29th that, according to Cailian Press, Federal Reserve Chairman Jerome Powell stated that the current policy stance is appropriate andPANews reported on January 29th that, according to Cailian Press, Federal Reserve Chairman Jerome Powell stated that the current policy stance is appropriate and

Powell: Nobody expects a rate hike at the next meeting; a rate hike is not anyone's base case.

2026/01/29 08:06
Haber Özeti
On January 29th, Fed Chair Jerome Powell indicated that the current policy stance effectively supports both economic objectives. Recent data reveals robust growth, positioning the Fed favorably to navigate dual mandate challenges. However, the latest figures don't definitively demonstrate that policy remains restrictive, so officials will monitor critical indicators and let the data guide their path forward.Tariffs have already sent ripples across the economy and could trigger a temporary price spike. Notably, most inflation exceeding expectations stems from tariffs rather than consumer demand. Core PCE excluding tariff effects hovers just above 2.00%. The tariff impact on goods should crest this year before gradually dissipating.The unemployment rate appears more stable now, with the labor market seemingly finding its footing after a measured cooldown—hiring, job openings, and wage growth remain consistent. Powell observed that if tariff-driven inflation peaks then retreats, the Fed might ease policy. He anticipates tariff inflation will top out around mid-2026 yet cautioned they must stay alert to labor market downside risks.The policy rate falls within a reasonable neutral range, providing flexibility regarding timing and magnitude of future moves. He emphasized there's no predetermined course, and decisions unfold meeting by meeting. Nobody foresees a rate hike next time. He believes the Fed won't lose independence but warned that doing so would shatter credibility that's nearly impossible to restore.

PANews reported on January 29th that, according to Cailian Press, Federal Reserve Chairman Jerome Powell stated that the current policy stance is appropriate and conducive to progress in achieving both objectives. Data since the last meeting shows a significant improvement in growth, placing the Fed in a favorable position to address the risks of its dual mandate. It is difficult to conclude from the latest data that policy is clearly restrictive; the Fed will focus on key target indicators and let the data guide the direction. No comment was made on the US dollar. The significant impact of tariffs has already been transmitted through the US economy, and tariffs may lead to a one-off price increase. Most of the higher-than-expected inflation is due to tariffs rather than demand. Core PCE, excluding the impact of tariffs on goods, is slightly above 2%. The impact of tariffs on goods is expected to peak this year and then decline. The US unemployment rate has shown some signs of stabilization, and the labor market, after a gradual softening, may be stabilizing, with little change in hiring, job openings, and wage growth.

Powell stated that if tariff inflation peaks and then declines, it would indicate that the Federal Reserve can ease policy. He expects tariff inflation to peak in mid-2026. However, he also noted that downside risks to the labor market must be monitored. The policy rate is within a reasonable range of the neutral rate, placing the Fed in a favorable position to determine the magnitude and timing of additional rate adjustments. He reiterated that there is no predetermined path for policy, and decisions will be made at each meeting. No one expects a rate hike at the next meeting, and a rate hike is not anyone's base case. He does not believe the Fed will lose its independence. He argued that if the Fed loses its independence, its credibility will be difficult to restore and advised the next Fed chairman to distance himself from American politics.

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