Federal Reserve Chair Jerome Powell said the central bank would probably have begun lowering interest rates this year had President Donald Trump not imposed steep tariffs that boosted U.S. inflation expectations. Speaking on 1 July at the European Central Bank’s annual forum in Sintra, Portugal, Powell acknowledged that the Fed “went on hold” after assessing the size of the levies, adding that inflation projections “went up materially as a consequence.” The Fed has kept its benchmark federal-funds rate at 4.25%-4.50% since December 2024, after trimming it by one percentage point last year. Powell’s remarks underscore how trade policy has constrained monetary easing even as the White House pressures the central bank for swift cuts. The tariffs, including a 145% duty that took effect on 9 April, have complicated the Fed’s dual mandate by putting upward pressure on prices while growth has slowed. Powell reiterated that policy decisions would be made “meeting by meeting” and did not rule out action at the next Federal Open Market Committee gathering on 29-30 July, saying any move will depend on incoming data. He also defended the Fed’s independence amid escalating criticism from Trump, who this week again urged large rate reductions and called the chair “too late.”