03:05 PM EDT, 07/30/2025 (MT Newswires) -- The current level of policy restrictiveness is appropriate to protect against the risk that tariff impacts could be larger or more long-term than some expect, Federal Reserve Chairman Jerome Powell said Wednesday in a press conference after the Federal Open Market Committee meeting.

"Changes to government policies continue to evolve, and their effects on the economy remain uncertain," Powell said. "Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen."

Powell said that he sees the current level of the federal funds rate as "modestly restrictive" and said that there are no signs that the economy is being held back by the level of policy. Instead, the policy level is "well positioned" to see how conditions evolve given that the effects of tariffs could be "short-lived" or more persistent.

"We see our current policy stance as appropriate to guard against inflation risk," Powell said. "We are also attentive to risks on the employment side of our mandate. In coming months, we will receive a good amount of data that will help inform our assessment of the balance of risks and the appropriate setting of the federal funds rate."

The FOMC left the target rate for the federal funds at 4.25% to 4.50% at its meeting and made no significant changes to its statement other than to acknowledge the slowing of economic growth in the first half of the year.

However, two Fed governors, Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, dissented from the decision in favor of a 25-basis point rate reduction. This was the first time two governors had dissented at the same meeting since 1993 and aligns with their recent comments.

Powell noted that the majority of the FOMC saw inflation a bit above target and maximum employment at target, which calls for the modestly restrictive stance, but said that the dissenting opinions provided for good conversation around the table.