Powell remains focused on inflation

US Federal Reserve Chair Jerome Powell told the Republican-held House (of Representatives) Financial Services Committee on Tuesday that the Fed’s policy position is not meant as a criticism of President Donald Trump's tariff policy.

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But he said that there is the expectation among professional economists that it could have an impact because rise in tariffs would mean rise in domestic prices of the imported goods, and the rise in prices would in turn lead to rise in inflation. He said, “We aren't commenting on tariffs. Our job is to keeping inflation under control, and when policies have shortand medium-term, meaningful, implications, then inflation becomes our job.”

Powell has been facing criticism from Trump that the Fed Chair was not reducing interest rate, which now stands between 4.25 per cent and 4.50 percent. The American economy has not been doing too well in terms of growth. Powell has assured the committee that the economy was in a strong position. Powell is however not inclined to reduce interest rates and ease borrowing which could lead to new businesses and economic expansion.