Powell said the Federal Reserve needs to address the risks of persistent tariff inflation.

According to Gate News bot, Reuters reports that Federal Reserve Chairman Jerome Powell indicated to a Senate panel on Wednesday that the Trump administration's tariff plan is likely to only cause a one-time price rise, but the risk of it leading to more sustained inflation is significant enough for the Central Bank to be cautious when considering further rate cuts.

Although economic theory may suggest that tariffs would cause a one-time shock to prices, "this is not a natural law," Powell said, explaining why the Central Bank wants to obtain more information about the final levels of tariffs and their impact on prices and public inflation expectations before further lowering borrowing costs.