Rate path unclear but tariff impact is coming, says Fed chief Powell

US central bank holds interest rates steady for a fourth straight meeting

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WASHINGTON - There are a lot of unknowns about the outlook for the US economy and interest rates, but US Federal Reserve chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming.

Policymakers at the Fed voted unanimously to hold interest rates steady for a fourth straight meeting on June 18 as they await clarity on whether tariffs will leave a one-time or more lasting mark on inflation.

Mr. Powell said it is still unclear how much of the bill will fall on the shoulders of consumers, but he expects to learn more about tariffs this summer.

"We've had goods inflation just moving up a bit," Mr. Powell said in a news conference after the Fed's policy meeting. "We do expect to see more of that over the course of the summer."

"Ultimately the cost of the tariff has to be paid, and some of it will fall on the end consumer," he said. "We know that's coming, and we just want to see a little bit of that before we make judgments prematurely."

US President Donald Trump's 90-day pause on most of his sweeping "reciprocal" tariffs is set to expire on July 9, when levies would increase drastically for many nations, absent trade deals or a further extension.

Goods from the European Union, for instance, are facing a 50 per cent tariff.

If the Fed moves too quickly to lower interest rates, it risks inflaming inflationary pressures that are already poised to flare back up because of Mr. Trump's tariffs.