Jerome Powell says the Fed can afford to wait and see before cutting rates. Other economists aren’t so sure

Federal Reserve Chair Jerome Powell walks to his left past several staggered American flags and flags with the emblem of the Federal Reserve. (Credit: Chen Mengtong—China News Service/VCG/Getty Images)

• The Federal Reserve has yet to cut interest rates in 2025 as it seeks greater clarity on the eventual effects of President Donald Trump’s tariff policy. While Fed Chair Jerome Powell suggested it’s in a “good position” to act decisively if necessary, some economists worry this approach could make the central bank slow to respond to a downturn. 

Consumer sentiment has plummeted amid trade policy uncertainty, Federal Reserve Chair Jerome Powell acknowledged Wednesday, and commentary in the central bank’s own “Beige Book” suggests businesses are already feeling the effects of President Donald Trump’s tariffs.