But Powell acknowledged in his press conference afterwards that he and his colleagues may have been unusually swayed by inertia in their estimates given how little they could say with confidence about the next few months.
With Trump’s announcement, their situation may have become even more complicated.
“The increased risks to both inflation and employment put the Fed in an even greater bind going forward,” wrote Evercore ISI Vice Chair Krishna Guha, with the “messy” fallout from tariffs raising fears among officials that public inflation expectations may start to rise.
That could leave the central bank on hold to keep a grip on prices or cutting fast if the economy slides.
“At this point, the likelihood of no cuts, two or three cuts or five-plus in a recession are all roughly equal,” he said.
