Powell reveals whether effects from tariffs have moved through economy on prices

• Most goods price inflation is attributed to tariffs, viewed as a one-time price increase rather than demand-driven inflation.
• Core PCE inflation, excluding tariff effects on goods, is currently running slightly above 2%.
• The expectation is for tariff effects to peak and then decline, which could allow for a loosening of monetary policy if the labor market remains stable.

Federal Reserve Chair Jerome Powell discussed the impact of tariffs on inflation, stating that most of the overrun in goods prices is due to tariffs, which he considers a one-time price increase. He noted that core PCE inflation, excluding tariffs, is running just above 2%. Powell suggested that if tariff effects peak and subside, and the labor market remains stable, the Fed could consider loosening policy.