Federal Reserve press conference, 2025-03-19 — Chair Jerome Powell

Question (Howard Schneider, Reuters): Howard Schneider with Reuters. Thanks for your time. So two things on sort of the real side here, one inflation and then—and then GDP. How much of the higher inflation forecast for this year is due to tariffs, and since the policy path remains the same, are you effectively reading this as a one-time price-level shock?
Answer: Okay, so how much of it is, is tariffs? So let me say that it is going to be very difficult to have a precise assessment of how much of inflation is coming from tariffs and from, from other—and that’s already the case. You may have seen that goods inflation moved up pretty significantly in the first two months of the year. Trying to track that back to actual tariff increases, given what was tariffed and what was not—very, very challenging. So some of it—the, the answer is clearly some of it—a good part of it is, is coming from tariffs. But we’ll be—we’ll be working, and so will other forecasters, to try to find the best possible way to separate nontariff inflation from tariff inflation. In terms of the, the—your, your sort of looking-through question, too soon to say about that. As, as I’ve mentioned, it, it can be the case that it’s appropriate sometimes to look through inflation if it’s going to go away quickly without action by, by us, if it’s transitory. And that can be the case in the case of, of tariff inflation. I think that would depend on the, the tariff inflation moving through fairly quickly and would depend critically, as well, on inflation expectations being well anchored—longer-term inflation expectations being well anchored.