U.S. Federal Reserve Chair Jerome Powell looks on, on the day he testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress,” on Capitol Hill in Washington, D.C., U.S., June 25, 2025.
Kevin Mohatt | Reuters
It’s the what-could-have-beens that hurt the most. The childhood sweetheart who moved to a different country. The early opportunity to invest in a company designing graphics chips for games. The lower interest rates if not for tariffs.
On Tuesday, U.S. Federal Reserve Chair Jerome Powell confirmed that tariffs — and, specifically, their unexpectedly large “size” — are the chief reason the central bank hasn’t lowered rates this year since it last cut them in December.
Imagine that. We could have been living in a world where the fed funds rate is at a range of 4% to 4.25%. If inflation was staying obediently below the Fed’s 2% goal, the range could even be 3.75% to 4%, given that the central bank in June kept last year’s projection of two rate cuts in 2025.
The thought stings. But it might help to think that if U.S. President Donald Trump hadn’t slapped tariffs on partners and penguins, his other policies could have similarly pushed inflation forecasts higher.
Remember how all three major U.S. indexes surged and hit new records on Trump’s election victory because Wall Street was anticipating tax cuts and looser corporate regulation. Without the dampening effect of tariffs, economic optimism might have spilled over into exuberance and higher inflation.
Better to play the cards we were dealt with than to lapse into imagined futures.
What you need to know today
And finally…
In recent years, the company has transformed from a competent private sector telecommunications firm into a “muscular technology juggernaut straddling the entire AI hardware and software stack,” said Paul Triolo, partner and senior vice president for China at advisory firm DGA-Albright Stonebridge Group.
Ramon Costa | SOPA Images | Lightrocket | Getty Images
