00:00The U.S. Federal Reserve has held interest rates steady between 4.25 percent and 4.5 percent,
00:06signaling two potential cuts in 2025. However, updated Fed forecasts project inflation,
00:13as measured by the Personal Consumption Expenditures Price Index, to rise beyond
00:173 percent in 2025, up from earlier estimates. This comes as Federal Reserve Chair Jerome Powell
00:23warned that tariffs are likely to cause a meaningful increase in inflation in the coming
00:27months, with the cost ultimately falling on the consumer. Despite recent upbeat economic data,
00:33including stronger job growth and improved consumer sentiment in May and early June,
00:38Powell cautioned that these positive signs might be a delayed effect of how tariffs work through
00:42the economy. The Fed anticipates that the full impact of tariffs will become more apparent in
00:47the coming months. While the economy isn't showing signs of weakening yet, Powell acknowledged that
00:53growth will eventually slow, raising the specter of stagflation, a challenging combination of
00:58higher prices and slower economic growth. This outlook is a growing concern for both the Fed
01:03and market watchers. Money Explainers
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