09:57 AM EDT, 07/01/2025 (MT Newswires) -- Federal Reserve Chairman Jerome Powell said Tuesday that President Donald Trump's rollout of widespread tariffs caused the central bank to hold off on lowering interest rates so far this year.

"Effectively, we went on hold when we saw the size of the tariffs," Powell said at a European Central Bank panel discussion with other central bankers. "Essentially, all inflation forecast went up materially as a consequence of tariffs.

"As long as the economy is in solid shape, we think the prudent thing to do is wait and learn more and see what those effects might be, and they haven't really shown up right now, so we're waiting," he said.

The latest inflation data shows prices have remained fairly stable, with the headline figure close to the Fed's 2% goal at 2.3% and core prices, which exclude food and energy prices, at 2.7%, Powell said.

"We expect to see over the summer some higher readings, but we're prepared to learn that it can be higher or lower or later or sooner than we expected," Powell said.