Federal Reserve Chair Jerome Powell addressed market expectations regarding tariffs’ impact on prices, stating they are temporary and considered a reasonable baseline scenario. He highlighted the stable unemployment rate as a favorable factor, allowing for a measured approach to adjusting monetary policy. Powell underscored the need to prevent short-term price fluctuations from escalating into lasting inflation. He introduced a new economic framework designed to address various conditions, including potential downsides in employment prospects. Notably, following his statements, traders have significantly increased the likelihood of a Federal Reserve rate cut in September to around 90%, reflecting these concerns.