Jerome Powell confirms the Fed would have already cut interest rates if if weren't for Trump's tariffs

Federal Reserve Chair Jerome Powell said Tuesday he’s holding the line on interest rate cuts.

Speaking at a central bank conference in Sintra, Portugal, Powell said he plans to “wait and learn more” about key economic issues like trade, tariffs, inflation, and unemployment before the Fed makes any short-term decisions on interest rates.

“We’re simply taking some time,” Powell noted in his speech, "As long as the U.S. economy is in solid shape, we think that the prudent thing to do is to wait and learn more and see what those effects might be."

Taking an indirect shot at President Donald Trump, Powell said the Fed would have likely already lowered interest rates if the White House hadn’t unveiled its aggressive tariff policy this spring. “I do think that’s right,” Powell noted, in response to an audience member’s question about potential rate cuts in the first half of 2025.

On Monday, President Trump sent a handwritten note to Federal Reserve Chair Jerome Powell assailing him for not lowering interest rates. In her daily press conference, White House Press Secretary Karoline Leavitt displayed the caustic note, which included a list of 44 countries and their corresponding interest rates.

"The American people want to borrow money cheaply and they should be able to do that," Leavitt told reporters. "But unfortunately, we have interest rates that are still too high."

Trump's diatribe against Powell was written in what appeared to be a black Sharpie marker. He has long been fond of employing black Sharpies to sign government documents, executive orders, and the occasional screed for social media posts.

Highlighted in yellow was a cohort of nine countries with interest rates at 4.5% that included the U.S., Guatemala, Israel, and Vietnam, among others. "Jerome — you are, as usual, 'Too Late,'" Trump wrote. "You have cost the USA a fortune — and continue to do so — You should lower the rate — By a lot!"

Further above, Trump wrote that the U.S. "should be here" and drew an arrow toward Denmark and the Seychelles Islands. Both have interest rates of 1.75%. The current U.S. benchmark interest rate is between 4.25% and 4.5%

Trump has called Powell a “numbskull” and a “moron” in previous comments.

Powell’s comments on Tuesday track with recent statements from other Federal Reserve officials on the economy and interest rates.

Chicago Federal Reserve Bank President Austan Goolsbee, speaking at the Aspen Ideas Festival in Aspen, Colorado, on Monday, said he isn’t worried about 1970s-style stagflation, given that U.S. inflation and the jobless rate are moderating, for now.

Marked by double-digit price hikes, 13% inflation, and jobless rates pushing past 7.8%, stagflation in the '70s vexed cash-strapped businesses and consumers and flummoxed economists. That’s a scenario the Fed is looking to avoid in 2025.

Citing no apparent short-term damage from President Trump’s ongoing U.S. trade and tariff policy, Goolsbee said there were no signs of supply-side shocks that could rock the economy, as occurred in the late 1970s.

He did, however, issue a caveat.

“But there's definitely the possibility of both things (inflation and the unemployment rate) getting worse at the same time," Goolsbee said. "And there you usually say, well, how long is each side's discrepancy going to last? Do you think it's temporary or do you think it's permanent? And how big is each side? ... That's the way I think about it."

—Joseph Zeballos-Roig contributed to this article.