Federal Reserve Chair Jerome Powell reiterated that the U.S. central bank would likely have cut rates further this year if President Donald Trump had not overdone it with trade tariffs.

"Basically, we paused when we saw the size of the tariffs, and essentially all inflation forecasts in the United States were significantly revised due to these tariffs," Powell said Tuesday during a panel discussion with other leading central bank officials. "We believe it's most prudent to wait, learn more, and see what the consequences might be," he added.

Nevertheless, when asked whether the Fed would leave the interest rate unchanged in July, Powell said that no decision had been made yet. "We're going meeting by meeting. I wouldn't take any meeting off the table or push it back immediately. It will depend on the incoming data."The next Federal Open Market Committee (FOMC) meeting is scheduled for July 29–30 in Washington.

Powell stated that he expects the impact of tariffs to show up in inflation data over the coming months, while acknowledging that uncertainty remains. "We are observing. We expect to see higher figures over the summer than we currently have," he said.

Powell also declined to comment on whether he plans to leave the Fed when his term as chair ends in May next year.

These remarks highlight the complex relationship between monetary policy and geopolitical uncertainty, particularly in the context of global trade tensions. Powell's comments emphasize that the trade policy pursued by the Trump administration directly affects the U.S. economic outlook. The imposition of tariffs creates uncertainty for businesses, forcing companies to reassess investment plans and supply chains. This in turn puts downward pressure on economic growth and adds to inflation, prompting the Fed to respond with tighter monetary policy.

In closing, Powell added that policymakers are prepared to acknowledge that the effects of the trade war could be smaller than previously expected, but concrete decisions are premature at this stage. This year, the Fed has refrained from cutting interest rates despite intense pressure from Trump, in part to determine whether tariff-induced price increases could translate into more persistent inflation. So far, no significant price surges have materialized.

Policymakers unanimously voted in June to keep rates unchanged. However, updated quarterly projections revealed a split among officials regarding the likely path of rates. While 10 policymakers forecast at least two cuts this year, seven predict no cuts in 2025. Two others expect just one cut by the end of the year.

Trump's introduction of new tariffs on dozens of U.S. trading partners, along with frequent changes in tariff policy and stalled trade negotiations, has injected uncertainty into the economic outlook. Forecasters generally expect tariffs to put upward pressure on inflation and restrain economic growth.

As for the current technical outlook for EUR/USD:Buyers now need to focus on reclaiming the 1.1800 level. Only then will a test of 1.1840 be possible. From there, a move toward 1.1875 could occur, although doing so without support from large players will be quite difficult. The furthest target would be the 1.1905 high. In the event of a decline, I expect significant buying activity only near the 1.1750 level. If there is no interest there, it would be preferable to wait for a renewal of the 1.1686 low or consider long positions from 1.1640.

As for the current technical outlook for GBP/USD:Buyers of the pound need to reclaim the nearest resistance at 1.3750. Only this would open the path toward 1.3780, above which a breakout would be quite difficult. The furthest target would be the 1.3850 level. If the pair falls, bears will attempt to regain control at 1.3715. If they succeed, breaking below this range would deal a serious blow to bulls and push GBP/USD toward the 1.3678 low, with a potential move to 1.3640.