Federal Reserve Chairman Powell outlined a plan on Wednesday for a scenario of higher inflation and slower growth. “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said at the Economic Club of Chicago. “For the time being, we are well positioned to wait for greater clarity” regarding policy changes linked to immigration, taxation, regulation, and tariffs, he noted. The policy-sensitive US 2-year Treasury yield eased yesterday, closing near the low of recent months and signaling that the market is still expecting rate cuts at some point in the near term.
