Powell also stated that he has never actively requested to meet with any president, nor will he do so in the future.

整理: Ye Zhen, Wall Street Insights

In the face of tariff uncertainties, the Federal Reserve once again chose to stand pat. One message that Powell repeatedly conveyed during the press conference was: wait and see.

On Wednesday, May 7, the Federal Reserve announced after the FOMC monetary policy committee meeting that the target range for the federal funds rate would remain unchanged at 4.25% to 4.5%. This marks the third consecutive monetary policy meeting where the Fed has decided to pause action. Since September of last year, the Fed has cut rates in three consecutive meetings, 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 have far exceeded expectations. However, all these policies are still evolving, and their impact on the economy remains highly uncertain. As economic conditions change, the Fed will continue to determine the appropriate monetary policy stance based on future data, outlook, and risk balance.

Powell noted that the economy has remained resilient, the policy stance is appropriate, and the Fed is now in a favorable position to wait without rushing to take action, as the cost of further waiting is relatively low.

Regarding the recent divergence in soft and hard data in the U.S., Powell stated that 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 correlation.

In response to Trump's calls for rate cuts, Powell made it clear that this has no direct impact on the Fed's decision-making, as the Fed's decision-making process is independent and based on economic data and analysis.

Powell also stated that he has never actively requested to meet with any president, nor will he do so in the future. He believes that the Fed Chair should not actively seek meetings with the president.

Here is the record of the Q&A session following the FOMC meeting:

Powell: Good afternoon. My colleagues and I remain focused on achieving our dual mandate: maximum employment and price stability for the benefit of 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 the 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 last quarter's GDP. 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, consumer spending growth 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 policy.

How 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 averaged an increase 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 range of indicators suggests that labor market conditions are broadly balanced and consistent with expectations of full employment.

The labor market is not a significant source of inflationary pressure. Inflation has significantly retreated from its mid-2022 peak but remains slightly elevated relative to our long-term target of 2%. Over the 12 months ending in March, the total price index for personal consumption expenditures (PCE) rose by 2.3%, while core prices, excluding volatile food and energy categories, increased by 2.6%. Recent inflation expectation indicators have risen, as reflected in market indicators and survey-based measures. Respondents, including consumers, businesses, and professional forecasters, indicated that tariffs are a factor driving inflation higher.

However, most long-term expectation indicators remain consistent with our 2% inflation target beyond next year.

Our monetary policy actions are aimed at promoting maximum employment and price stability for the American people. At today's meeting, the committee decided to maintain the target range for the federal funds rate 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. 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 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 tasks of maximum 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 position regarding the dual mandate goals. If that happens, we can consider how far the economy is from each goal and what time is expected to close those 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 "Fed Listens" events across the country and a research conference to be held next week.

Throughout this process, we welcome new ideas and critical feedback and will draw lessons from the past five years to ultimately finalize our research conclusions. We plan to complete the review by the end of summer.

The Federal Reserve's monetary policy goals are twofold: maximum employment and price stability. We will continue to strive to support maximum employment, ensure that inflation rates consistently reach the 2% target, and maintain stable long-term inflation expectations.

Our success in achieving these goals matters to all Americans. We are keenly aware that our actions affect communities, families, and businesses across the nation, and everything we do is to serve our public mission.

Our federal government is doing its utmost to achieve the goals of maximum employment and price stability. Thank you. I look forward to your questions.

CNBC Reporter: Thank you for taking my question. A lot has happened since the last meeting. Tariffs have fluctuated, and Congress is advancing a bill. I would like to ask you 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 inflation have both increased, of course, compared to the data from March. So that's what we can say.

I think we cannot predict how things will unfold. There are many uncertainties, such as how tariff policies will ultimately resolve and when they will resolve, and what impact they 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 because we are waiting for further clarity on tariffs and their eventual impact on the economy.

CNBC Reporter: Hearing you describe what you are looking for in making decisions, it sounds like a long process before you feel comfortable, or the committee feels comfortable taking action based on the data.

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. Inflation is slightly above 2%. So, this is a resilient and well-performing economy, and our policy is moderately or slightly 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 mode. We think we don't have to rush. We believe we can wait patiently. We will focus on the data. Data changes can be fast or slow. But we do believe we are in a favorable position to let things develop and become clearer regarding monetary policy responses.

Wall Street Journal Reporter: Some believe there are significant differences in the current situation, with energy costs declining, the housing market imbalanced, and labor demand seemingly cooling, with wage growth below 4%. Besides this year's rise in commodity prices, what other factors do you think could lead to rising inflation?

Powell: I think the underlying 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 now in a favorable position to wait and see. We don't have to rush. The economy has remained resilient and is performing quite well. Our policy stance is appropriate. We believe the cost of further waiting is relatively low.

So, this is 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, 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 the impacts are. 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 point where it becomes necessary 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 rush, and being patient is appropriate. Of course, as things develop, we have proven that we can act quickly when necessary. 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. Then we can 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 Fed to cut rates preemptively. 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, what I mean is, 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 inflation is declining, now sitting around the low 2% range. Our economic growth rate has reached 2.5%. This is the economic situation we see now.

Given the scope and scale of tariffs, we are likely to see rising risks of inflation and unemployment. 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 established goals and have never deviated from that. But at least for the next year, we may not be able to make significant progress in this regard. Of course, all of this depends on how the tariffs ultimately play out.

The problem is, we are not clear on this. There is too much uncertainty regarding the scale, scope, timing, and duration of the tariffs. So, that's that.

Speaking of preemptive action, I think you can look back at the 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 the target now, and we expect that if conditions change, inflation will face upward pressure. If you look at the forecasters, they are all predicting 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 release any predictions about this. We will not issue any assessments of the likelihood of a recession. But in any case, we cannot prepare in advance because we do not really know how to respond correctly to this data until we see more of it.

New York Times Reporter: How much weakness in the labor market and overall economy would the committee need to see before considering another rate cut? Is it a certain degree of increase in the unemployment rate over time, or a certain number of negative monthly employment reports? How do you make such an assessment?

Powell: First of all, we have not seen that yet. Our unemployment rate is at 4.2%, labor participation is good, wage performance is solid, 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 changes. We will analyze a vast amount of labor market data to understand whether the situation is truly 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 goal and how long it would take to return to that goal. 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. What I mean is, 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 goals, such as the unemployment rate rising in a concerning way while inflation is also rising, etc. This is not the situation we are assuming. But we will consider how far they are from the targets, how far they are expected to be from the targets, and how long it is expected to take to return to the targets. We will take all these factors into account and make a difficult judgment, which has already been included in our framework. This has been in our thinking for a long time. We have not encountered this issue for a while. 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.

Fox Business News Reporter: The recently released Consumer Price Index report 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 cut rates this year?

Powell: It depends on the situation. I think you have to take a step back and realize that we are in this current position because we need to observe how things develop. In some cases, it would be appropriate for us to cut 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 appropriate.

Fox Business News Reporter: So next, President Trump has called for you and the Federal Reserve to cut rates. How does this affect your decision today and the difficulty of your work?

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 only consider economic data, economic outlook, and risk balance, and that’s it. That is all we need to consider. So this does not actually affect our work or how we 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. If so, can you predict the extent and degree of the slowdown? What does your intuition tell you about how the situation is developing?

Powell: The uncertainty regarding the economic trajectory is extremely high, and downside risks have increased. As we pointed out in the statement, the risks of rising unemployment and inflation have increased. But these risks have not yet materialized. They really have not. These risks have not truly shown up in the data. So, this is more convincing than what my intuition tells me because I think, in reality, it is evident that what we should do is that we are 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 hard to say what it will specifically be.

In the meantime, 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 we are better off waiting to gain a clearer understanding of 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… 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 areas, and many investment decisions are being postponed. 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 they are indeed 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 the economic data. Perhaps it won’t show up overnight, but it is possible within weeks or months. This may 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, but we can imagine they will. In short, we are all watching the situation very closely, just like everyone else, but in the current economic data, we have not seen too many definitive signs.

By the way, consumers are still spending, credit card spending is still ongoing, and the economy remains healthy. Even though individuals and businesses are under the shadow of some very gloomy sentiment.

Bloomberg Television Reporter: The Federal Reserve has recently faced criticism from a former board member, who believes that the policy tools you have adopted make it unlikely that you will 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 has implemented quantitative easing and exceeded your mandate?

Powell: Well, I mean, this really 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 state 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 explained quantitative easing better. 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 lasted too long. I can tell you that the reason we did this was that 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 did indeed maintain quantitative easing for a long time, then gradually tapered, and then immediately entered a quantitative tightening phase, ultimately reducing trillions of dollars. But I know, in hindsight, we could certainly have tapered earlier or faster. That is completely correct.

But all of this was 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 some 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 listen to me say over and over again, we will not be climate policymakers. Our role in climate issues is very, very narrow. I think we truly are. We have done very little on climate issues.

You could say that the little we have done is too much. But I do not want to leave the impression that we have considered climate issues along with other things we have invested a lot of time and energy in. We have not. Our scope is very, very narrow.

We did one thing, provided guidance to banks, and then we did a stress analysis, a climate stress analysis, and that’s it. We stepped back from focusing on the financial system. We have not done much on climate issues. But— I do believe I have publicly said several times that I think trying to take on such a task is really dangerous for us because it is very narrow in scope. The risk is that if you do something that is actually outside your mandate, then why are you still independent? I think that is a very fair question. I do believe that the work we have done 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 maximum employment is a broad and inclusive goal. I think what we mean by that is that when we set the goal of maximum employment, we consider the entire country. Of course, we have never intended to target any specific group. But I think some people, you know, want to hear such statements. But that is not our intention at all.

So, this is not the correct interpretation of us—I understand—that, you know, perhaps people find this confusing, and we have to take that into account.

CBS News 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 being felt at the ports, and businesses of all sizes are telling us they are experiencing it. Most importantly, they say consumers are feeling it too, and the challenges have arrived; 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, with people worried about rising prices and such. So, people are currently concerned about inflation. They are worried 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 reduction in economic activity, leading to an increase in the unemployment rate. The other is that inflation may rise. Again, the timing, scope, scale, and duration of these impacts are all very, very uncertain. Therefore, the appropriate monetary policy response is not clear at this time. By the way, our policy is in a good state, so we believe we can wait until the right response becomes clear before taking action. Mr. President, we really do know what we should do.

So, people feel pressure and concern, but the unemployment rate has not risen, job creation is good. Wage conditions are solid. You know, people are not being laid off—layoff numbers have not significantly increased. Preliminary statistics show that unemployment claims have not seen any significant growth. So, the economy itself remains robust.

CBS News 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, you seemed to indicate that it is unclear what kind of rate decisions the Federal Reserve will 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 do not summarize economic forecasts at every meeting, but we do so at every other meeting, so we did not do that at this meeting. And we will not conduct a poll. So I really do not want to make specific predictions about our current economic situation.

In six weeks, we will have the June meeting, followed by another SEP meeting. I do not dare to speculate on the specifics today.

Once again, I want to say that we believe our policy rate is at a good level. We believe 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 a decision.

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 issue 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 accurately pointed out—that is exactly the contradiction we face in achieving both 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 priority needs to be given to the target that is further off. Frankly, there have been such situations—well, although at that time there was not 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 was not really a trade-off issue.

I think you know what our framework document says. It states that 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 do not know. The data can easily lean one way or the other. And right now, we have no way—there is no need to make a choice, nor is there a real basis for it.

Politico Reporter: Congress is extending tax cuts, and I know you have mentioned multiple times that the trajectory of debt is unsustainable. But considering we are now discussing an economic slowdown, and possibly even 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 practices as given and incorporate them into our models and economic assessments. So, I do not want to speculate on this. I think we do know that debt levels are at an unsustainable level, on an unsustainable path—not at an unsustainable level, but on an unsustainable path—Congress should find a way to get us back on a sustainable path, you know, we should not be giving them advice.

Politico Reporter: Do you think they should take macroeconomic conditions into account when examining this issue?

Powell: I think they do not need my and our advice on how to formulate fiscal policy. Just as we do not need their advice on monetary policy.

Washington Post Reporter: Last year, when you spoke at Jackson Hole, you stated that you did not want the labor market conditions to cool further, when the unemployment rate was at 4.2%, and it is the same now. Many forecasters are now predicting a higher unemployment rate. How has your tolerance for weakness in the labor market changed compared to a year ago?

Powell: The situation is completely different. Last year, the unemployment rate rose by almost a full percentage point over a period of six to seven months. And every month it was like "click, click," with discussions everywhere about the downside risks to the labor market.

Meanwhile, 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—what I mean is, we have been focused on inflation for several years, and we also wanted to signal that we are concerned about the labor market. Sending such a signal was very important.

Fortunately, since then, the labor market and unemployment rate have been fluctuating sideways and are within the range of mainstream maximum employment estimates, so people’s 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 the statement, the risks are high, with both inflation and unemployment rising. We must closely monitor both. We may face a situation where a "tropical wave" could occur 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 now consider both variables simultaneously. If one variable needs our attention more than the other, then which variable needs our attention more will determine how we formulate policy. If the distances between them are roughly the same, or equal or unequal, then we do not need to assess. You know, the key to assessment is waiting.

So, I will not 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 strive to support that. You would hope it does not happen during a time when inflation becomes very severe. Again, we are just speculating. We do not 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 have had some talks in Geneva between the U.S. and China, and many economists place great importance on the information we hear 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 days rather than weeks. So, I would also like to hear your thoughts on this.

Powell: We are not involved in these negotiations at all. So I really cannot comment directly. However, I want to say that after the March meeting, there was a general public assessment of the direction of tariffs. 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 predictions.

So now we are in a different phase—we seem to be entering a new phase where the government is starting negotiations with some of our important trading partners, which may or may not substantively change the status quo. So I think the final 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 the facts change.

Financial Times Reporter: Given that these tensions have led to a decline in cargo volumes from China, are you also concerned that if this issue is not resolved quickly, we may start to see shortages and price increases in goods in the coming weeks?

Powell: You know, I do not want—we should not verbally intervene in the timing of these matters. Yes, of course, we will track all data. We look at shipping data. We understand all this data. But ultimately, this is still the government's business. It is their responsibility, not ours. I know, as you can see, they are negotiating with many countries, which has the potential to 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: Our decision today? Which decision?

Financial Times Reporter: Future decisions. The volume of imports and imported goods has increased significantly. Therefore, the impact on input inflation may be delayed. So, what impact does this have on your future decisions?

Powell: Okay. So, what I mean is, we believe—import volumes have surged significantly, which is very good, and indeed reached historical highs. To respond to tariffs, this situation should now reverse, so it is the difference between exports and imports. Import volumes are huge. Therefore, it has had a very negative contribution to U.S. GDP, which is what we know as the first quarter annualized GDP.

So, this situation may reverse in the second quarter, at which point we will see an unusually large contribution, unusually positive growth. Due to the sharp decline in imports, this situation is very likely to occur.

You may also—very likely you will see the first quarter data being restated. The results will show that consumer spending is higher, and inventories are also higher, so you will see these data being revised upward. This may actually also affect the third quarter. So I think the whole process will slightly increase the difficulty of making a clear assessment of U.S. demand.

I mentioned private domestic final purchases, excluding inventories, as well as government inventories—government stock. In short, this better reflects private demand. However, 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 in our attempts to explain it, we may feel more confused than the public. It is complex, and both GDP and PDFP are sending signals. This is indeed a bit perplexing, but I believe we understand what is happening, and it will not really change our current situation.

Axios Reporter: We have discussed some potential layoffs, rising prices, and economic slowdown, all of which are evident in the soft data. I am 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. At this point, waiting does not have any 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—there may be different responses needed. Therefore, we have the capacity to wait before we learn more. This seems to be a fairly clear decision. Everyone on the committee supports waiting. So that is 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 quite weak; it is not a strong connection at all.

On the other hand, we have never experienced such rapid and large fluctuations. So, we will not 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 could happen, and to some extent, it may happen. We just do not know. However, this is a huge shift in market sentiment. So none of us are looking at all this and saying we are absolutely certain about it. We really are not.

CNN Reporter: You previously mentioned that you are monitoring shipping data, and we have seen a significant decrease in goods imported from China to the Port of Los Angeles. This has raised concerns about potential shortages. If tariffs indeed 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 do not have the tools to effectively deal with supply chain issues. We simply do not. This is primarily the responsibility of the government and the private sector.

We can use interest rate tools to support demand, or to some extent support demand, but this is a very inefficient way to address supply chain issues.

But we have not seen inflation yet. Of course, we, like others, are reading the same reports and monitoring the same data. Currently, we see inflation fluctuating at quite low levels.

CNN Reporter: Can I follow up on that? President Trump has indicated that after your term as chairman expires next year, he may appoint a successor. But I believe your board term will last until January 2028. Even if you are no longer chairman, would you consider staying on the Federal Reserve Board?

Powell: I have nothing to say on that. My colleagues and I are focused on, you know, working through this difficult time we are currently in, striving 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: Your publicly recorded schedule shows that you have not met with President Trump so far this year. Former Presidents Obama, Bush, and Clinton 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 a meeting with any president, nor will I ever. I will not do that. I have never had a reason to request a meeting. It has always been this way.

Yahoo Finance Reporter: If given the opportunity to gain more information, would you be willing to meet with him?

Powell: I have never been proactive about this. It has always been the other way around—you know, I believe the Federal Reserve chair should not proactively seek a meeting with the president. Although some people may have done that. But I have never done that. I cannot 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 yet.

Yahoo Finance Reporter: Regarding monetary policy. When a rate cut is needed in the context of weak employment, how will you determine how much the rate needs to be lowered 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 it will become clear. Fortunately, as I mentioned, our policy is in a good state, the economic situation is good, and we believe that patiently waiting for developments is very appropriate, as it will become clearer what we should do. Thank you very much.

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