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Federal Reserve Chair Jerome Powell on June 25 said the U.S. central bank is still struggling to determine the impact of tariffs on consumer prices.

The Federal Reserve will continue to wait and see how the economy evolves before deciding whether to reduce its key interest rate, Chair Jerome Powell said June 24.

Federal Reserve officials expect inflation to worsen in the coming months but they still foresee two interest rate cuts by the end of this year, the same as they projected in March.

The Labor Department reported June 12 that its producer price index rose 2.6% in May. Producer prices rose 0.1% from April to May after dropping 0.2% the month before.

The responses to a Federal Reserve Bank of New York survey came as President Donald Trump struck a deal that significantly — though temporarily — lowered tariffs on imports from China.

Two Federal Reserve officials, including New York Fed chief John Williams, suggested policymakers may not be ready to lower interest rates before September.

Federal Reserve Governor Michael Barr said the economy is on solid ground, but warned tariff-related supply chain disruptions could lead to lower growth and higher inflation.

Median expectations for inflation three years from now rose to 3.2% in April, the highest reading since July 2022. Estimates for year-ahead price growth, however, held steady.

Federal Reserve officials held interest rates steady for a third straight meeting and emphasized they see a growing risk of both higher inflation and rising unemployment.

President Donald Trump allayed fears that he plans to fire Fed Chair Jerome Powell and signaled he would be "very nice" to China in trade talks.