by Met Middleson

June 18, 2025

Federal Reserve Chair Jerome Powell delivered a stark warning during his Q&A session Wednesday, stating that policymakers expect a “meaningful amount” of inflation to appear in the near term. The comment reflects growing concern inside the Fed that recent price pressures, especially those tied to tariffs and trade disruptions, are beginning to ripple through the economy.

While Powell emphasized that the long-term outlook still includes a return to lower inflation, his acknowledgment of short-term price surges marks a shift in tone. It suggests the Fed may not be as close to cutting rates as markets had hoped. Instead, the central bank is signaling a “wait-and-see” approach, where flexibility will depend on how quickly inflation shows up, and how persistent it proves to be.

The remark comes just after the Fed voted to hold rates steady and reiterated its forecast of two cuts by year’s end. But Powell’s off-script language hints at rising internal uncertainty. If higher inflation does materialize in the months ahead, the Fed could be forced to delay rate cuts, or even consider tightening further.