Full text of Powell's press conference Q&A: Wait and see, no preemptive rate cuts

Faced with tariff uncertainties, the Federal Reserve once again chose to hold steady, with Powell repeatedly conveying one message at the press conference: wait and see.On Wednesday, May 7, the Federal Reserve announced after the Federal Open Market Committee (FOMC) meeting that the target range for the federal funds rate remains unchanged at 4.25% to 4.5%. This marks the third consecutive monetary policy meeting where the Federal Reserve has decided to pause action. The Fed has cut rates in three consecutive meetings since last September, totaling a reduction of 100 basis points, and has been on hold since Trump took office in January.During the Q&A session following the FOMC meeting, Powell stated that the announced tariff increases so far have exceeded expectations. However, all these policies are still evolving, and their impact on the economy remains highly uncertain. As economic conditions change, the Federal Reserve will continue to determine the appropriate monetary policy stance based on future data, outlook, and risk balance.Powell stated that the economy has remained resilient, the policy stance is correct, and the Federal Reserve is now in a favorable position to wait and see, with the cost of further observation being quite low.Regarding the recent divergence between soft and hard data in the U.S., Powell noted, looking back over the past few years, the connection between sentiment data and consumer spending has been weak, and there is fundamentally not a strong connection.In response to Trump's calls for rate cuts, Powell made it clear that this has no direct impact on the Federal Reserve's decision-making, emphasizing that the Fed's decision-making process is independent and based on economic data and analysis.Powell also stated, he has never proactively sought to meet with any president, nor will he do so in the future. He believes that the Federal Reserve Chair should not actively seek meetings with the president.Below is the record of the Q&A session after the FOMC meeting:Powell: Good afternoon. My colleagues and I remain focused on achieving our dual mandate: maximum employment and stable prices, to benefit the American people. Despite increasing uncertainty, the economy remains solid. The unemployment rate remains low, and the labor market is at or near full employment. Inflation has significantly decreased but is still slightly above our long-term target of 2%. To support our goals, the Federal Open Market Committee decided today to maintain the policy rate unchanged. The risks of rising unemployment and inflation seem to have increased, and we believe that the current monetary policy stance allows us to respond promptly to potential economic developments.After briefly reviewing economic developments, I will discuss monetary policy in more detail.Following a growth of 2.5% last year, reports indicate a slight decline in GDP in the first quarter. This reflects export volatility, which may be due to businesses importing goods ahead of potential tariffs taking effect. This unusual volatility complicates the measurement of GDP for the last quarter. Excluding net exports, inventory investment, and government spending, private domestic final purchases (PDFP) grew steadily by 3% in the first quarter, unchanged from the same period last year. In PDFP, the growth of consumer spending has slowed, while investment in equipment and intangible assets rebounded from weakness in the fourth quarter. However, surveys of households and businesses show a sharp decline in consumer confidence and increased uncertainty about the economic outlook, primarily reflecting concerns about trade policyHow these developments will affect future spending and investment remains to be seen. The labor market remains robust. Over the past three months, job openings have increased by an average of 155,000 per month, and the unemployment rate has remained low at 4.2%, staying within a narrow range over the past year.Wage growth continues to slow but remains above the inflation rate. Overall, a series of indicators suggest that the labor market is generally balanced, consistent with expectations of full employment.The labor market is not a factor causing significant inflationary pressure. The inflation rate has significantly retreated from its mid-2022 peak, but it is still slightly above our long-term target of 2%. For the 12 months ending in March, the total price of personal consumption expenditures (PCE) rose by 2.3%, while core prices, excluding the more volatile food and energy categories, increased by 2.6%. Recent inflation expectation indicators have risen, as reflected in market indicators and survey-based metrics. Respondents, including consumers, businesses, and professional forecasters, pointed out that tariffs are a factor driving inflation upward.However, most long-term expectation indicators remain aligned with our 2% inflation target beyond next year.Our monetary policy actions are aimed at promoting full employment and price stability for the American people. At today’s meeting, the committee decided to maintain the federal funds rate target range at 4.25% to 4.5% and continue to reduce the size of the balance sheet. The new administration is implementing significant policy reforms in four different areas: trade, immigration, fiscal policy, and regulation.The announced tariff increases have far exceeded expectations so far. However, all these policies are still evolving, and their impact on the economy remains highly uncertain. As economic conditions change, we will continue to determine the appropriate monetary policy stance based on future data, outlook, and risk balance.If the significantly increased tariffs that have already been announced persist, it is likely to lead to rising inflation, slowing economic growth, and increasing unemployment.The impact of tariffs on inflation may be temporary, reflecting a one-time change in price levels. The inflation effect may also be more persistent. Whether this can be avoided depends on the scale of the tariff effects, the time required for their full transmission to prices, and whether long-term inflation expectations can ultimately be effectively stabilized.Our obligation is to control long-term expectations and prevent one-time price increases from evolving into a persistent inflation problem. In fulfilling this obligation, we will balance the dual tasks of full employment and price stability, keeping in mind that without price stability, we cannot achieve a long-term, stronger labor market condition that benefits all Americans.We may find ourselves in a challenging situation regarding the dual mandate goal setting. If this occurs, we can consider how far the economy is from each target and what time is expected to be needed to close these gaps. Currently, we are in a favorable position to wait for a clearer situation before considering adjustments to our policy stance.At this meeting, the committee continued discussions on the five-year review of the monetary policy framework, focusing on inflation dynamics and their implications for monetary policy strategy. The review includes outreach activities and public events, involving broad participation from various parties, including "Federal Reserve Listening" events across the country and a research conference to be held next weekThroughout the process, we are open to new ideas and critical feedback, and we will draw lessons from the past five years to finalize our research conclusions. We plan to complete the review by the end of summer.The Federal Reserve's monetary policy objectives are twofold: maximum employment and price stability. We will continue to strive to support maximum employment, ensure that the inflation rate consistently reaches the 2% target, and maintain stable long-term inflation expectations.Whether we can successfully achieve these goals is related to all Americans. We are keenly aware that our actions will affect communities, families, and businesses across the country, and everything we do is to serve our public mission.Our federal government is doing everything possible to achieve the goals of maximum employment and price stability. Thank you. I look forward to your questions.CNBC Reporter: Thank you for answering my question. A lot has happened since the last meeting. Tariffs have increased and decreased, and Congress is advancing a bill. I would like to ask about the last part of your remarks. Are you now closer to determining which goal will need urgent attention first?Powell: Well, as we mentioned in the post-meeting statement, we assess that the risks of rising employment and rising inflation have both increased, certainly compared to the data from March. So, that's what we can say.I think we cannot predict how things will develop. There are many uncertainties, such as how tariff policies will ultimately resolve and when, and what impact that will have on the economy, growth, and employment. I think it is too early to draw conclusions now.What I mean is that we ultimately believe our policy rate is in a good position as we await further clarity on tariffs and their eventual impact on the economy.CNBC Reporter: Hearing you describe what you are seeking in making decisions, it sounds like a long process before you feel comfortable, or the committee feels comfortable taking action based on what the data tells you.Powell: I think we don't know. You know, if you look at our current situation. Our economy, if you closely observe the distortions in first-quarter GDP, you will find that the economy is growing steadily, and the labor market seems robust. The inflation rate is slightly above 2%. So, this is a resilient and well-performing economy, and our policy is moderately or somewhat restrictive. It has been reduced by 100 basis points from the restrictions of last fall. Therefore, we believe this puts us in a wait-and-see position. We think we don't have to rush. We believe we can be patient. We will focus on the data. Data changes can happen quickly or slowly. But we do believe we are in a favorable position, and we can let things develop and become clearer in terms of monetary policy responses.The Wall Street Journal Reporter: Some believe there are significant differences in the current situation, with energy costs declining, the housing market imbalanced compared to four years ago, and labor demand seemingly cooling down, with wage growth below 4%. What do you think are the factors, aside from this year's commodity price increases, that could lead to rising inflation?Powell: I believe the potential inflation outlook is good. As you can see, the current inflation rate is slightly above 2%, and the data on housing services and non-housing services is generally good, with housing services accounting for a large portion of inflation. This part of inflation is progressing steadily.But there are too many unknowns. I think—and we are currently in a favorable position to wait and see, that’s it. We don’t have to rush. The economy has remained resilient and is performing quite well at the moment. Our policy stance is correct. We believe the cost of waiting further is relatively low.So, that’s what we are doing. You know, we will see the government negotiating with many countries on tariff issues. As time goes by, week by week, month by month, we will have a better understanding of the final direction of tariffs. When we start to see the severity of the situation, we will know what its impact is. So, we believe we will continue to learn. I can’t tell you how long this will take, but for now, it seems we have made a fairly clear decision to wait and see.Wall Street Journal Reporter: When you say you don’t need to rush, does that mean the outlook could change to the extent that you would need to change your stance at the next meeting?Powell: As I said, we are satisfied with our policy stance. We believe now is the right time to wait and see how things develop. We feel there is no need to act hastily; being patient is appropriate. Of course, as things develop, we have proven that we can act quickly when the time is right. But we believe the most appropriate course of action right now is to wait and see. There is too much uncertainty. If you talk to businesses, market participants, or forecasters, you will find that everyone is waiting to see how things develop. Only then can we better assess the reasonable path for the fourth round of monetary policy.So, we have not reached that point yet, and as things develop, I really can’t give you a timeframe.Bloomberg Reporter: Many economists have raised the likelihood of a recession, with some pointing out that given the higher risks of rising inflation, it will be more difficult for the Federal Reserve to cut interest rates in advance. So, considering the outlook, do you still believe there is a possibility of a soft landing for the economy? What is the outlook for a soft landing?Powell: Well, I mean, let’s review our current situation. Looking back from 2024 to now. You know, our unemployment rate has been below 4% for over a year, and the inflation rate is also declining, now at around 2%. Our economic growth rate has reached 2.5%. This is the economic situation we see now.Considering the scope and scale of tariffs, we are likely to see an increase in inflation and unemployment risks. If that is indeed the case, and these tariffs are ultimately implemented at the levels currently envisioned (though this is still uncertain), then we will find it difficult to continue making progress toward our goals, and there may even be delays. I believe that in our philosophy, we have always been committed to achieving our established goals and have never deviated from them. But at least for the next year, we may not be able to make significant progress in this regard. Of course, it all depends on how the tariffs ultimately play outThe problem is that we are not clear about this. There is too much uncertainty regarding the scale, scope, timing, and duration of tariffs. So, that's that.Speaking of preemptive action, I think you can look back at the interest rate cuts in 2019. I don't think our actions last fall were entirely preemptive. If there is any difference, it was a bit late. But we did cut rates three times in 2019. The situation at that time was that the economy was weak, and inflation was at 1.6%. So, in that context, you could act preemptively. Now our inflation rate has been above target for four consecutive years. It is not too far above target now, and we expect that if circumstances change, inflation will face upward pressure. If you look at the predictors, they all forecast that inflation will rise.So, this indeed creates a situation— we have also received forecasts of economic weakness, with some even predicting a recession. We will not make or publish any predictions about this. We will not publish any assessments of the likelihood of an economic recession. But in any case, we cannot be prepared in advance because we do not actually know how to respond correctly to this data until we see more data.New York Times Reporter: How much weakness in the labor market and overall economy does the committee need to see before it would consider cutting rates again? Is it a certain degree of increase in the unemployment rate over a period of time, or a certain number of negative monthly employment reports? How do you make such an assessment?Powell: First of all, we haven't seen that yet. Our unemployment rate is at 4.2%, labor participation is good, wage performance is good, as I mentioned earlier, labor participation is at a good level. Therefore, for the labor market, we will focus on the overall data. We will pay attention to the level of unemployment and the speed of its change. We will analyze a vast amount of labor market data to understand whether the situation is really deteriorating. At the same time, we will also pay attention to the other side of the task. We may need to strike a balance between these two aspects, which is certainly a very difficult balancing judgment.New York Times Reporter: Regarding the balancing issue, you mentioned that the committee would consider how far the economy is from each target and how long it would take to return to that target. But what does that mean in practice? To what extent is the assessment based on forecasts versus data?Powell: It is a combination of both. I mean, you could say this will be a complex and challenging judgment we have to make. And our current situation is not like that. If there is a conflict between the two targets, such as the unemployment rate rising in a concerning way, and inflation also rising, etc. This is not the situation we are assuming. But we will consider how far they are from the target, how far they are expected to be from the target, and how long it is expected to take to return to the target. We will consider all these factors and make a difficult judgment, which has already been included in our framework. This has been in our thinking for a long time. We haven't encountered this issue for a long time. So, again, this is a difficult judgment to make. And the situation we face today is not like that. We may never encounter it. But, you know, we must keep this in mind nowFox Business News Reporter: The consumer price index report we just released shows that the employment inflation rate has risen month-on-month for the first time in three years. The employment report is performing robustly. Meanwhile, we are facing new tariffs. Given this, should the Federal Reserve lower interest rates this year?Powell: It depends on the situation. I think you have to step back and realize that we are in this position because we need to observe how things develop. In some cases, it would be appropriate for us to lower rates this year. In other cases, it would not be appropriate. We do not know that yet. Until we have a better understanding of how things will develop and their economic impact on employment and inflation, I cannot confidently say which path is the right one.Fox Business News Reporter: Next, President Trump has called for you and the Federal Reserve to lower interest rates. How does this affect your decision today and the difficulty of your job?Powell: This will not affect our work at all. So we will always do the same thing, which is to use our tools to promote maximum employment and price stability for the benefit of the American people. We will always only consider economic data, economic outlook, and risk balance, and that’s it. That’s all we need to consider. So this really does not affect our work or how we do our work.Reuters Reporter: Thank you for your time. Given the first quarter GDP data and the complexity of the future situation, I wonder what your intuition is about the current economic trajectory. Many of your colleagues have indicated that they feel economic growth is slowing down. If so, can you predict the extent and degree of the slowdown? What does your intuition tell you about how things are developing?Powell: The uncertainty around the economic trajectory is extremely high, and downside risks have increased. As we pointed out in our statement, the risks of rising unemployment and rising inflation have increased. But these risks have not yet materialized. They really haven’t. These risks have not yet truly reflected in the data. So, this is more compelling than what my intuition tells me because I think, in fact, it is evident that we should be in a good state, our policy is in a very good state, and what we should do is wait for further clarity.Typically, things will gradually become clearer, and the right direction will also gradually become clear. This usually happens. It is still difficult to say what exactly it will be.Meanwhile, the economic situation is good. Our policy is not— you know, it is not highly restrictive. It is just slightly restrictive. It has been reduced by 100 basis points from the restrictions of last summer, so we believe the economic situation is good, and it is best for us to wait and see to better understand the economic direction.Reuters Reporter: I want to emphasize your statement about the current good economic conditions because when I last carefully read the Beige Book, I found a lot of negative information in it... Everyone is focusing on weak data, and you have mentioned that market sentiment is low. Some industries are starting to lay off workers, prices are rising in some places, and a large number of investment decisions are being put on hold. Doesn’t this indicate an economic slowdown?Powell: This is very likely to happen, it just hasn't manifested yet. You know, we all look at various sentiment indicators and read many individual comments to better grasp the situation. Overall, businesses and households are indeed worried and are postponing various types of economic decisions. Yes, if this situation continues and nothing happens to alleviate these concerns, then you can expect that this impact will eventually be reflected in economic data. It may not manifest overnight, but it is possible within weeks or months. This might be what is about to happen, it just hasn't happened yet. At the same time, there are indeed some events that could change this expectation, although these things have not appeared yet, we can imagine they will. In short, we are all closely monitoring the situation just like everyone else, but we haven't seen too many definitive signs in the current economic data.By the way, consumers are still spending, credit card spending continues, and the economy remains healthy, despite individuals and businesses being overshadowed by some very gloomy sentiments.Bloomberg Television Reporter: The Federal Reserve has recently faced criticism from a former governor, suggesting that the policy tools you have employed make it unlikely for you to take more aggressive actions in the future. Do you think this criticism is fair? Is this something you are considering?Powell: Repeat the criticism.Bloomberg Television Reporter: The Federal Reserve has used too many new tools to solve problems and has gone overboard. Is the criticism based on the fact that the Federal Reserve implemented quantitative easing policies and exceeded your mandate?Powell: Well, I mean, this actually does not exceed our mandate. What I want to say is that we did some things, essentially, during the pandemic, we were in an emergency that lasted for years. If people look back at what we did and say, "Hey, you could have done better and differently," that is very fair and very welcome. One thing we often hear is that we could have better explained the quantitative easing policy. We do believe that our explanation at the time was appropriate for the actual situation. I fully accept the idea that we could have explained it better.Many people believe that our quantitative easing policy lasted too long. I can tell you that we did this because we were concerned that the economy was still fragile and did not want to see a significant tightening and deterioration in financial conditions, so we indeed maintained the quantitative easing policy for a long time, then gradually tapered, and then immediately entered a quantitative tightening phase, ultimately reducing by trillions of dollars. But I know, in hindsight, we certainly could have tapered earlier or faster. That is completely correct.But all of this is very welcome. You know, we realized at the time that real-time decision-making could not be perfect. This kind of retrospective review is very important. And we are doing similar work as we review some issues.Bloomberg Television Reporter: Another part of the criticism is that you have talked about topics beyond your mandate, such as climate change, and trying to ensure that certain groups benefit from your economic policies in areas like employment.Powell: Okay. Regarding climate, if you hear me say over and over again, we are not climate policymakers. Our role in climate issues is very, very narrow. I think we really are. We do very little on climate issues.You could say that the little bit we do is too much. But I don’t want to leave the impression that we are considering climate issues along with other things we spend a lot of time and energy on. We are not. Our scope is very, very narrow.We did one thing, we provided guidance for banks, and then we did a stress analysis, a climate stress analysis, and that’s it. We stepped back from the network focused on the financial system. We are not doing much on climate issues. But—I do think, I have said publicly several times, I think trying to take on such a task is really dangerous for us because it narrows our scope of work. The risk is that if you go do something that is actually outside your responsibilities, then why are you still independent? I think that’s a very fair question. I do think the work we are doing on climate issues is much less than some people think. In short, that is—Bloomberg Television Reporter: Should you consider the issue of lowering unemployment rates for specific groups?Powell: We have not done that. We have said that we have never set unemployment rate targets for any race or demographic group. What we have said is that full employment is a broad and inclusive goal. I think what we mean by that is that when we set full employment goals, we will consider the entire country. Of course, we never intended to target any specific group. But I think some people, you know, want to hear that kind of statement. But that is not at all what we mean.So, that is not the correct interpretation of us—I understand— you know, maybe people find that confusing, and we have to take that into account.CBS News Channel Reporter: Hi, Chairman Powell, thank you for answering our questions today. You just mentioned that the current economic situation is good, but the impact of tariffs is already showing at the ports, and businesses of all sizes are telling us they are feeling it. Most importantly, they say consumers are feeling it too, and the challenges have arrived, and there can be no more waiting. What is the tipping point for the mainstream market? What specifically needs to happen to prompt a rate cut?Powell: Well, so far we have not seen significant economic impacts from the data. What we see is market sentiment, people worrying about rising prices and the like. So, people are now worried about inflation. They are concerned about the impact of tariffs. But in reality, that impact has not yet arrived.Therefore, when assessing what actions we should take, we will not only look at sentiment data but also at actual economic data. Keep in mind that this will have two effects. One is economic weakness, a slowdown in economic activity, leading to rising unemployment rates. The other is that inflation may rise. Again, the timing, scope, scale, and duration of these impacts are very, very uncertain. Therefore, the appropriate monetary policy response at this time is not clear. By the way, our policy is in good shape, so we think we can wait until the right response measures are clear before taking actionMr. President, we really know exactly what we should do.So, people feel pressure and concern, but the unemployment rate has not risen, and job creation is good. Wage conditions are good. You know, people are not being laid off—the number of layoffs has not significantly increased. Preliminary statistics show that the number of unemployment benefit applications has not seen any significant growth. So, the economy itself remains robust.CBS News Channel Reporter: Just a quick follow-up. President Trump has now stated that he does not intend to remove you from your chairmanship. What are your thoughts upon hearing this news?Powell: I have no more to say on that issue. I have basically covered this topic. Thank you.AP Reporter: I just want to follow up. Previously, it seemed you mentioned that it was unclear what kind of interest rate decisions the Federal Reserve would make later this year. There was guidance in March suggesting that there might be two rate cuts planned for this year. Has the guidance from the last press conference now been replaced by the current situation?Powell: You know, we don’t summarize economic forecasts at every meeting, but we do so every other meeting, so we didn’t do that this time. And we also don’t conduct opinion polls. So I really don’t want to make specific predictions about our current economic situation.In six weeks, we will hold the June meeting, followed by another SEP meeting. I wouldn’t want to speculate on the specifics today.Again, I want to say that we believe our policy rate is at a good level. We think this allows us to respond in a timely manner to potential developments. That is our current situation. And depending on how things develop, this may include rate hikes—sorry, rate cuts. You know, it may also include maintaining the status quo. We just need to observe how things develop and then make decisions.AP Reporter: I want to continue asking this question. When you talk about how the Federal Reserve responds to rising unemployment and rising inflation, how do you view the fact that addressing one of these issues may exacerbate the other? So, cutting rates to lower unemployment may exacerbate inflation, and vice versa. How do you tackle these challenges?Powell: You just pointed out accurately—that is exactly the dilemma we face in achieving our two goals. This is a very challenging issue. Sometimes, one variable deviates from its target far more than the other variable, and if that is the case, then we need to prioritize the one that is further off target. Frankly, there have been such situations—well, although at that time there wasn’t a real conflict between the two goals. But if you look back at 2022, we clearly needed to focus on controlling inflation. The labor market was also very tight at that time, so this wasn’t really a trade-off issue.I think you know how our framework document states. It says we will examine the distance of each variable from its target while also considering the time required to reach the target. So, this can be a very difficult judgment. But the data may show some degree of bias. I just feel that we don’t know. The data can easily lean one way or the other. And right now, we really have no way—no need to make a choice, nor is there a real basis for itPolitico Reporter: Congress is extending the tax cut policy, and I know you have mentioned multiple times that the trajectory of debt is unsustainable. But considering we are also discussing an economic slowdown, and possibly a recession, I wonder if spending cuts now could significantly drag down economic growth?Powell: We do not provide fiscal advice to Congress. They will only— we take our actions as given and incorporate them into our models and economic assessments. So, I don't want to speculate on that. I think we do know that debt levels are at an unsustainable level, on an unsustainable path—not an unsustainable level, but on an unsustainable path—Congress should find a way to get us back on a sustainable path, you know, we shouldn't be giving them advice.Politico Reporter: Do you think they should take macroeconomic conditions into account when examining this issue?Powell: I don't think they need my or our advice on how to formulate fiscal policy, just as we don't need their advice on monetary policy.Washington Post Reporter: Last year, when you spoke at Jackson Hole, you mentioned that you did not want the labor market conditions to cool further, when the unemployment rate was 4.2%, and it is the same now. Many forecasters now predict that the unemployment rate will be higher. How has your tolerance for a softening labor market changed compared to a year ago?Powell: The situation is completely different. Last year, the unemployment rate had risen nearly a full percentage point over six to seven months. And every month it was like "clicking" with discussions everywhere about the downside risks to the labor market.At the same time, job data was becoming increasingly weak, so people were clearly concerned about the downside risks to the labor market. So, at Jackson Hole and in the following September, we wanted to address this issue directly; we wanted to signal— I mean, we have been focused on inflation for several years, and we also wanted to signal that we are concerned about the labor market. It was very important to send that signal.Fortunately, since then, the labor market and unemployment rate have been fluctuating sideways and are within the range of mainstream maximum employment estimates, so concerns have eased significantly. So, the unemployment rate is now 4.2%. I think our situation at that time was different. Now, as we mentioned in our statement, the risks are elevated, with both inflation and unemployment rising. We must closely monitor both. We may face a potential "tropical wave" between the two. That is our current situation, and that is why I think the situation is different.Washington Post Reporter: How much of an increase in the unemployment rate can you tolerate?Powell: I cannot give— I will not try to give a specific number. I want to say that we must consider both variables simultaneously now. If one variable requires our attention more than the other, which variable needs our attention more will determine how we formulate policy. If the distance between them is roughly the same, or equal or unequal, then we do not need to assessYou know, the key to assessment is waiting.So, I won't try to specify what data we need to see. However, if we do see a significant deterioration in the labor market, that is certainly one of our two variables, and we will work to support that. You would hope it wouldn't happen during a time when inflation becomes very severe. Again, we are just speculating. We don't know these things. We know nothing. This is just a hypothesis. We can only wait and see how things develop.Financial Times Reporter: To clarify some issues, we had some talks between China and the U.S. in Geneva, and many economists place great importance on the information we heard from these talks. How important do you think these talks are for judging the future direction of the U.S. economy? Similarly, some economists have stated that if we do not ease U.S.-China relations, the U.S. economy could soon face risks of shortages and price increases similar to those during the pandemic, and this could happen in a matter of days rather than weeks. So, I would also like to hear your thoughts on this.Powell: We are not involved in those negotiations at all. So I really can't comment directly. However, I would say that after the March meeting, there was a general assessment of the direction of tariffs by the public. The results of the April 2 meeting showed that the magnitude of the tariffs is indeed much larger than the predictions I had seen before and our own forecasts.So, we are now in a different phase — it seems we are entering a new stage where the government is beginning negotiations with some of our important trading partners, which could or could not substantively change the status quo. So I think the ultimate outcome will be very important. But we can only wait and see. This could certainly change the status quo, and we are careful not to make final judgments about the future when facts change.Financial Times Reporter: Given that these tensions have led to a decline in freight volumes from China, are you also concerned that if this issue is not resolved quickly, we might start seeing shortages and price increases in goods in the coming weeks?Powell: You know, I don't want — we shouldn't verbally intervene in the timing of these matters. Yes, of course, we will track all the data. We look at shipping data. We understand all this data. But ultimately, this is still the government's responsibility. It is their duty, not ours. I know, as you can see, they are negotiating with many countries, which could potentially substantively change the situation. So, we can only wait and see.Financial Times Reporter: Thank you. The quantity of imported goods increased significantly in the first quarter. Do you think this decision will lead to a delay in the impact of tariffs on inflation, and does this mean that reducing uncertainty will take longer?Powell: The decision we made today? Which decision?Financial Times Reporter: Future decisions. The volume of imports and imported goods has increased significantly. Therefore, the impact on imported inflation may be delayed. So, what impact does this have on your future decisions?Powell: Okay. So, what I mean is, we believe — the surge in import volumes is very good, and it has indeed reached historical highs. In response to tariffs, this situation should now reverse, so it is the difference between exports and importsThe import volume is enormous. Therefore, it has had a very negative contribution to the U.S. GDP, specifically what we know as the annualized GDP for the first quarter.So, this situation may reverse in the second quarter, at which point we will see an exceptionally large contribution and exceptionally positive growth. This is very likely to happen due to the sharp decline in imports.You may also—very likely you will see the first quarter data being restated. The result will show higher consumer spending and higher inventories, so you will see these data being revised upwards. This could actually also impact the third quarter. So I think the whole process will slightly increase the difficulty of clearly assessing U.S. demand.I mentioned private domestic final purchases, excluding inventories, and government inventories—government inventories. In summary, this better reflects private demand. But this may also be slightly elevated due to strong import demand offsetting tariffs. This could be overstated. The first quarter PDP grew by 3%, which is indeed a good figure. I don't think this will affect our decision-making. However, I must say that this is somewhat confusing, and when we try to explain this, we may feel more confused than the public. It’s complex, and both GDP and PDFP are sending signals. This is indeed a bit confusing, but I think we understand what is happening, and it won't really change our current situation.Axios Reporter: We discussed some potential layoffs, rising prices, and economic slowdown, all of which are evident in the soft data. I'm curious why the Federal Reserve needs to wait for this data to translate into hard data before making any type of monetary policy decision, especially when hard data may not be timely enough or could be affected by tariff-related impacts. Are you concerned that soft data might be some sort of false alarm?Powell: No. Look at the current economic situation. The labor market is robust, and inflation is low. We can afford to be patient and wait for developments. As it stands, waiting has no real cost.Moreover, it feels like we are uncertain about what the right course of action is. Inflation should rise, and the unemployment rate should also rise. These require different responses. So, until we understand more—different responses may be needed. Therefore, we have the capacity to wait until we have more information. This seems to be a fairly clear decision. Everyone on the committee supports waiting. So that’s why we are waiting.Axios Reporter: Just a quick follow-up. There was a situation before where the sentiment expressed in soft data did not translate into hard economic data. How do you view this issue when interpreting some of the milder survey data?Powell: I think, looking back over the past few years, the connection between sentiment data and consumer spending has been weak, not a strong connection at all.On the other hand, we have never experienced such rapid and large-scale fluctuations. So we won't completely ignore this. But this is another reason we are waiting. You are right, during the pandemic, there were years when people's survey results were very pessimistic, yet they went out and spent. So this situation could happen, and to some extent, it may happenWe just don't know. However, this is a significant change in market sentiment. So none of us are looking at all of this and saying we are absolutely certain about it. We really are not.CNN Reporter: You mentioned earlier that you are monitoring shipping data, and we see from the shipping data that imports from China to the Port of Los Angeles have significantly decreased. This has raised concerns about potential shortages. If tariffs do lead to severe supply chain disruptions, what tools does the Federal Reserve have to ensure that prices and inflation expectations do not spiral out of control?Powell: I mean, we don't have the tools that are good at dealing with supply chain issues. We really don't. This is primarily the job of the government and the private sector.We can use interest rate tools to support demand, or more or less support demand, but that is a very inefficient way to address supply chain issues.But we have not yet seen inflation. Of course, we, like others, are reading the same reports and watching the same data. Right now, we see inflation fluctuating at quite low levels.CNN Reporter: Can I ask one more question? President Trump has indicated that after your term as chair ends next year, he may appoint a successor. But I believe your board term will last until January 2028. Even if you are no longer chair, would you consider staying on the Federal Reserve Board?Powell: I have nothing to say about that. My colleagues and I are focused on, you know, trying to get through this difficult period we are in and trying to make the right decisions. We want to make the best decisions for the people we serve. This is what we think about day and night. It is a challenging situation, and it is our 100% focus right now.Yahoo Finance Reporter: So far this year, your publicly recorded schedule shows that you have not met with President Trump, while former Presidents Obama, Bush, and Clinton have all met with the Federal Reserve Chair, and you did meet with him during Trump's first term. Why have you not requested a meeting with the president?Powell: I have never requested to meet with any president, nor will I ever. I wouldn't do that. I have never had a reason to request a meeting. It has always been that way.Yahoo Finance Reporter: If given the opportunity to gain more information, would you be willing to meet with him?Powell: I have never taken the initiative. It has always been the other way around—you know, I think the Federal Reserve Chair should not be the one to seek a meeting with the president. Although some people may have done that. But I have never done that. I can't imagine myself doing that. I think it is always the other way around, the president wants to meet with you, but that has not happened.Yahoo Finance Reporter: Regarding monetary policy. When it comes time to cut rates, how will you determine how much to lower rates in the context of weak employment to maintain a balance with the inflation target?Powell: You know, I think once you have a direction, a clear direction, you can judge the pace of action and so on. So, I think the really difficult question is timing, and when things will become clearer. Fortunately, as I mentioned, our policy is in a good place, the economy is in good shape, and we think it is very appropriate to be patient and wait for things to develop because we will have a clearer idea of what we should doThank you very much