Officials at the Federal Reserve on Friday showed little sign of deviating from their message that there is no urgency to lower interest rates, despite a claim by President Trump that there is “no inflation.”
A solid economy affords the central bank the flexibility to wait and see what the economic impact of Mr. Trump’s tariffs will be, the policymakers made clear in a series of public remarks on Friday.
“Right now we have time,” John Williams, president of the Federal Reserve Bank of New York, said in an interview. “Policy is in a good place.”
That view was echoed by Adriana Kugler, a Fed governor, who on Friday stressed that the Fed could afford to be patient at a time when it was not clear which countries would face which levies, in addition to a range of policies related to taxes, immigration and regulation.
“Overall, we see health still in the real economy, so that gives us time to make sure that we continue to make progress on inflation, and we keep our inflation expectations very well anchored,” she said.
So far, the measures the Fed pays closest attention to in order to track expectations of consumer prices suggest that inflation will jump over the next year, but over time stay close to the Fed’s 2 percent target.
Inflation also eased unexpectedly sharply last month and is set to have stayed relatively subdued in April. But any comfort from that reprieve has been overtaken by fears that inflation will soon accelerate because of Mr. Trump’s tariffs.
That caution dominated the Fed’s meeting this week, when officials opted to again extend a pause in interest rate cuts. Jerome H. Powell, the chair, stressed that the economic backdrop was so uncertain that the central bank would need to wait and see what the impact of Mr. Trump’s policies would be before taking action.
Pre-emptive interest rate cuts are not appropriate for the moment, Mr. Powell made clear, especially when the Fed could soon be facing a complicated situation in which its two goals of low inflation and a healthy labor market could begin to clash with each other. Economists now increasingly think the Fed could hold its rate until September at the earliest.
The Fed’s decision drew criticism from Mr. Trump, who immediately revived attacks on Mr. Powell for not lowering interest rates. On Friday, he wrote in a social media post: “Costs down, NO INFLATION. Very different from what the Fed, and Fake News Media, were hoping for!”
