Powell Leans Dovish with "Transitory" Base Case for Tariffs

The Federal Reserve announced no change to its benchmark rate Wednesday, emphasizing a cautious approach in the face of elevated economic uncertainty. Fed Chair Jerome Powell reinforced the committee’s stance that patience remains the best course of action as they assess the “net effects” of new policy.

The latest Summary of Economic Projections showed no change to the median number of expected rate cuts this year, holding steady at two. The GDP growth outlook was revised a touch lower versus the forecasts from mid-December. Meanwhile, the median forecast for inflation, using the Fed’s preferred measure of core PCE, inched up to 2.8% from 2.5% in December. Participants’ assessments of uncertainty in their inflation and growth projections rose markedly compared to December.

Tariffs Take Center Stage

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