Yahoo Finance

The Federal Reserve holding rates steady, while Fed chair, J. Powell, points to the possibility of a rate cut in September. Let's get to Yahoo Finances Jennifer Schonberger with the details. Jen, got to say, that uh, answer that you got out of him at the end was a highlight for me.

Oh, thank you so much, Julie. I would say the number one phrase, if we were to take one away from this press conference, is that policy is in a good place, right? In the face of all this uncertainty. That was also maybe a buzzword for this press conference. But Fed Chair Powell very much stressing that given that the economy is in solid shape, even as they see risks rising for both unemployment and inflation. The Fed doesn't see any downside costs to waiting to see which path would be appropriate when it comes to policy. When the Fed chair was asked whether we could see any change in policy as soon as the next meeting, listen to what he had to say.

We feel like it's appropriate to be patient, and uh, you know, when, when things develop, of course, we have a, we have a record of, we can move quickly when that's appropriate. But we think right now, the appropriate thing to do is to wait and see how things evolve. There's so much uncertainty. If you talk to businesses, or market participants, or forecasters, everyone is just, is just waiting to see how developments play out.

Now, if tariffs were to remain in place, and Powell stressed there is a lot of uncertainty about that, certainly there are negotiations with China that are expected to kick off this weekend, but if they were to remain in place, then he says the Fed would anticipate higher inflation, higher unemployment, and lower growth. He says that right now, uh, both sides of the dual mandate are not conflicting with each other, though it will depend as things unfold, how all of that could shake out, whether they're farther on their unemployment side of the mandate, or farther on the inflation side of the mandate. Now, he also did address the notion of preemptive cuts, something that President Trump has been calling for. He underscored that the three cuts that the Fed did last fall were not considered preemptive, and that we're not in a situation where the Fed could actually execute preemptive cuts because it's unclear which direction the economy and inflation are going to go in. He talked about the prospect of expectation for higher inflation, uh, certainly in the short term, uh, if not in the long term, depending uh, how these tariffs play out. And so, he says with that, also in the, with the backdrop of a weakening economy, it's just not a situation where you could do preemptive cuts. Um, as for what the Fed would look for when it comes to cutting rates, and a deterioration in the job market, he says it will be the level of speed with which the unemployment rate increases, but also just looking at the totality of the data. And guys, I did ask the Fed chair why he hasn't requested a meeting with President Trump this year, so far. No meetings have been revealed on his schedule. Listen to what he had to say.

I've never asked for a meeting with any president, and I never will. That's not, I wouldn't do that. There's never a reason for me to ask for a meeting. It's always been the other way. So would you want to meet with him if given the opportunity to get more information?

I, I never, it's never an initiative that I take. It's always an initiative. I, I, you know, I don't think it's up to a Fed chair to seek a meeting with the president, although maybe some have done so. I've never done so, and I can't imagine myself doing that. I think it's always comes the other way. A president wants to meet with you, but that hasn't happened.

And we'll await whether we see a response from 1600 Pennsylvania Avenue.