“Given ... the likely boost to near-term inflation from tariffs, the bar for cutting rates, even in the face of a weakening economy and potentially increased unemployment, is higher.”

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”

Fed officials must decide this year whether to lower interest rates further to support the economy, or keep them elevated for longer to contain inflation. First they need to determine what proportion of inflation is tariff-related and whether that increase is temporary.

But according to Fed Chair Jerome Powell: “Overworked maybe, not overstaffed. Everybody at the Fed works really hard.”

However, officials reduced their expected number of rate cuts for next year from four to two.

Fed Chair Powell says rates will fall, but 'over time,' adding that the FOMC "is not a committee that feels like it's in a hurry to cut rates quickly."

"There's a strong argument for a half percent" interest rate cut when the Federal Reserve meets in mid-September. "It's going to be hotly debated."

"Now that inflation has come down and the labor market has indeed cooled off, we're going to be looking at both mandates. They're in much better balance."