10:40 AM EDT, 06/24/2025 (MT Newswires) -- The Federal Reserve can continue to wait and evaluate how the US economy responds to policy changes before the central bank adjusts its monetary policy, Chair Jerome Powell said Tuesday.

The world's largest economy is in a "solid position" despite elevated uncertainty levels, while the unemployment rate remains low, Powell said in prepared remarks to the House Committee on Financial Services.

Inflation has eased, but remains above the Fed's 2% long-term target, Powell said.

"For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance," according to Powell.

Fed Vice Chair for Supervision Michelle Bowman said Monday she would support lowering interest rates as soon as next month provided that inflationary pressures remain "contained." Last week, Fed Governor Christopher Waller reportedly said the Federal Open Market Committee may be in a position to ease monetary policy "as early as July."

In an early Tuesday social media post, President Donald Trump said that interest rates should have been lowered by "at least two to three" percentage points by now. He has repeatedly called on the central bank to cut rates.

The FOMC on Wednesday kept its benchmark lending rate unchanged for a fourth straight meeting, while sticking to its federal funds rate outlook for 2025 amid higher inflation expectations.

Markets are currently pricing in a 19% probability that policymakers will reduce interest rates by 25 basis points next month, according to the CME FedWatch tool. The remaining odds are in favor of another pause.

Continuously evolving policy changes have increased uncertainty, Powell said in his Tuesday remarks.

"The effects of tariffs will depend, among other things, on their ultimate level," according to the Fed chair. "Expectations of that level, and thus of the related economic effects, reached a peak in April and have since declined."

After announcing sweeping reciprocal tariffs early in April, Trump announced a 90-day pause on certain levies for non-retaliating countries. Earlier in June, the US and China agreed on a framework for implementing a pact that the two countries reached in Switzerland last month.

"The effects on inflation could be short lived-reflecting a one-time shift in the price level," Powell said. "It is also possible that the inflationary effects could instead be more persistent."