The “temporary” has returned because the Fed does not expect tariffs to have a prolonged effect on inflation

“Good ship temporary”, despite the ominous entry, looks ready to swim again Federal Reserve.

Economic forecasts Central Bank released on Wednesday Show that while officials see that inflation is moving more quickly than expected earlier, they also expect the trend to be short -lived. The forecast pushed the conversations again about “short” inflation This caused a serious headache for the Fed.

At his press conference after the meeting, chairman Jerom Powell He said that the current outlook is that any tariff jump prices are likely to be short -lived.

Asked if the Fed “return to the temporary again,” the Central Bank leader replied, “so I think it’s a basic business. But, as I said, we really can’t know. We’ll have to see how everything really works out.”

However, the prospect of the Federal Open Market Committee, when inflation reached 2.8% in 2025, but quickly retreating to 2.2%, and then 2% in the coming years, shows that officials do not expect tariffs on a solid load.

“It may be that it is sometimes appropriate to view inflation when it goes quickly, without action, if it is transitional,” Powell said. “This may be in the case of tariff inflation. I think it will depend on the moving inflation rather quickly and, critically, as well as the fact that inflation expectations are well fixed.”

Powell added that while surveys show that some short -term inflation rates have grown, market measures are well fixed for longer expectations.

Back in 2021, when inflation first rose past the 2% Fed target, Powell and his colleagues repeatedly talked They expected this step would be short -lived. However, inflation continued to grow, eventually reaching 9%, measured by the consumer price index, and the Fed was forced to respond to a number of aggressive rates of interest rates, which have not been observed since the early 1980s.

In a speech last August at Jackson Hall’s annual summit Powell even joked This is “a good moved ship was crowded,” and he told the participants that “I think I see ex -former shipyers today.”

The room smiled at Powell’s remarks, and the market on Wednesday seemed to not mind temporary conversations. Stocks jumped as the Powell spokeand Dow Jones Industrial Medium Recently, 383 points have been closed to 41 964, which changed the market in decline.

The “transitional” returned, or at least it was a hint, “said Ellis Assenbo, Head of the JP Morgan Wealth Management. “For me, for me, the market reaction says that investors are ready to believe that tariffs and other politicians will not create long -term inflation and that the Fed can remain in control.”

Fed voted Keep its benchmark interest rate on maintenance As it weighs the influence of tariffs and fiscal policies by Trump. Except Powell has warned again This policy is not blocked and is not a transitional view of inflation on tariffs.

“We will watch all this very, very carefully. We don’t accept anything for granted,” he said.