Press conference exchange between EDWARD LAWRENCE and Fed Chair Jerome Powell:

user: Thank you, Mr. Chairman. Edward Lawrence from Fox Business. How concerned are you, with, with the data that we’re showing—coming in showing no significant upward trend in inflation over the past six months, that the wait-and-see approach for inflation is actually giving companies cover to raise prices?

assistant: How concerned am I that the—say that again.

user: For, for cutting rates. You’re waiting to see if the tariffs will affect inflation. So it’s a wait-and-see approach so that—

assistant: Well, so that—you know, that would—that’s where we’re—policy’s restrictive. When we start cutting, it’ll go toward neutral.

user: Okay. This delay, though, where you’re saying it’s a one- time—one-time price increase for tariffs, which they—which possibly could lead into bigger inflation or more inflation, is that giving companies cover, though, to raise prices?

assistant: Well, what, what may be giving—it’s not our policy stance. What may be giving—some companies will certainly be taking advantage of the fact of the tariffs and all of the discussion of how they’re going to—you know, companies will raise prices when and as they can. And you—so you saw it famously in the—in the—in the first Administration of President Trump, during those tariffs. Washing machines were tariffed, but, but, but dryers weren’t. But what do you know? Price—the price of dryers went up, too, just like washing machines. So companies will often just take—they’ll cross the street in a group, if what I mean. That’ll happen. We don’t see a lot of that. I mean, what we see now is basically the very beginnings of whatever the effects turn out to be on goods inflation. And, you know, I’ll say again, they may be—they may be less than, than people estimate or more than people estimate. They’re not going to be zero. Consumers will pay some of this. Businesses will pay some of this. Retailers will pay some of this. But, you know, we’re just going to have to, to see it through.

user: And just a follow-up, if I could. Some additional tariffs have been in place since February, and things, you know, really haven’t broken yet with the economy. So how, how do you justify to somebody who’s looking for a house, who’s facing a 7 percent mortgage and maybe can’t afford those rates? How do you justify that?

assistant: Well, so the housing—the housing is a—is a special case. Right? Our—we don’t set—we don’t set mortgage rates at the Fed, right? We set an overnight rate, and the rates that go into mortgages are longer-term rates, like Treasury rates—it might be 30-year rates, it might be shorter than that, but it’s not the overnight Fed’s rate. It’s not that we don’t have any effect. We do have an effect, but we’re not the main effect. There are other things go—though, going on in the housing sector. And one of those is just, there’s a long-term housing shortage that we have. We haven’t built enough housing. This is not something the Fed can help with, but then that’ll be the case even after things normalize. So I, I think the best thing that we can do for housing is to have 2 percent inflation and maximum employment. And that’s the—that’s what we can contribute to housing. There are lots of other jobs to do for the private sector and Congress, but that’s what we’re trying to get to. And, I mean, we’ve made a lot of progress toward that. We’re in—we have a very good labor market right now. Inflation—we were very close to 2 percent. We’re seeing some goods inflation move us away but, so far, not very far away.