Federal Reserve Expects Inflation to Worsen in the Coming Months
- Better Neighbors Network
- Jun 24
- 2 min read
In its most recent forecast, the federal reserve expects the U.S. economy to slow significantly in the months ahead, projecting inflation to worsen, partially due to the tariffs imposed by President Donald Trump.
The Fed’s Latest Projections
Slower growth: U.S. economic growth is projected to fall to just 1.4% this year, down from 2.5% in 2024.
Higher inflation: The Fed's preferred measure of inflation is expected to rise to 3% by year’s end, up from 2.1% in April.
Rising unemployment: The jobless rate is now expected to reach 4.5%, compared to 4.2% today.
These economic pressures are coming on the heels of sweeping import tariffs announced by the Trump administration in early April. While many of those tariffs were temporarily delayed, they are scheduled to take effect on July 9, unless a deal is struck with key trading partners.
Powell Urges Caution, Not Politics
At a press conference, Fed Chair Jerome Powell said plainly:
“Increases in tariffs this year are likely to push up prices and weigh on economic activity.”
But he also cautioned that the full impact of the tariffs remains uncertain, and that making sudden changes to interest rates could do more harm than good. Instead, Powell emphasized the importance of waiting and gathering more information before acting.
“We’ll make smarter and better decisions,” he said, “if we wait just a couple of months...to get a sense of what is really going to pass through to inflation.”
Despite these warnings, President Trump has continued to push the Fed to lower interest rates, arguing that it would help the federal government reduce its own borrowing costs—now topping $1 trillion annually. He has publicly criticized Powell, calling him “stupid” and “political” for refusing to cut rates.
“So we have a stupid person. Frankly, you probably won’t cut today,” he said. “He’s a political guy who’s not a smart person, but he’s costing the country a fortune.”
