Fed Chairman Jerome Powell noted the impact of tariffs has so far remained at the lower end of expectations and could prove temporary.

America’s central bankers continue to deal with the double whammy of potentially higher inflation and a slowing labor market, Federal Reserve Chair Jerome Powell said Tuesday, calling it a “challenging situation” for Fed policymakers.

Fed Chair Jerome Powell has said that the economy faces a "challenging situation" as the labor market weakens while inflation persists.

A key measure of inflation rose at a slightly elevated pace in August, but not enough to suggest much bigger increases tied to U.S. tariffs are on the way.

Trump has been criticized lately for pressuring the Federal Reserve and threatening its independence. Critics argue that his efforts to appoint loyalists to the Fed, public calls to lower interest rates, and attempts to remove a sitting governor represent a clear move to sway monetary policy for political purposes.

The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve’s preferred measure of inflation, grew at an annualized rate of 3.2 percent in August 2025.

Despite the unexpected growth shown in GDP, caution signs remain in the U.S. economy. Unemployment claims overall are low, but filings by laid-off federal workers have been climbing in recent

Federal Reserve Bank of Kansas City President Jeff Schmid signaled the US central bank may not need to lower interest rates again soon, citing the need to keep bringing down inflation.