Economy

Fed Chair Powell Highlights Rising Short-Term Inflation Expectations Amid Tariff Impacts

Federal Reserve Chair Jerome Powell on Inflation Expectations

In a recent address, Federal Reserve Chair Jerome Powell shed light on the current state of inflation expectations, pointing out a noticeable rise in short-term projections. This increase is largely attributed to the impact of tariffs, as Powell emphasized during his speech.

"There is a widespread increase in short-term inflation expectations," Powell stated, referencing data from various surveys including those from households, businesses, and forecasters. Despite this uptick, Powell reassured that long-term inflation expectations have remained stable, showcasing the resilience of the economy over extended periods.

"Looking ahead five years, the break-even inflation rates are either flat or slightly down for the longer term," Powell added. He further explained that market-based indicators have shown minimal changes in inflation expectations beyond the five-year mark, with some even indicating a slight decrease.