03:07 PM EDT, 06/18/2025 (MT Newswires) -- There have been few signs that tariffs are pushing up inflation at this point, but the effects are likely to be seen in the coming months, Federal Reserve Chairman Jerome Powell said Wednesday in a press conference after the FOMC voted to maintain the target range for the federal funds rate at 4.25% to 4.50%.

"It takes some time for tariffs to work their way through the chain of distribution to the end consumer," Powell said. "A good example of that would be goods being sold at retailers today may have been imported several months ago before tariffs were imposed. So, we're beginning to see some effects. We expect to see more."

While the updated Summary of Economic Projections still shows two rate reductions in 2025, ending the year at a median rate of 3.9%, the outlook for 2026 is for only one rate reduction, down from two previously, and the same as in 2027.

The shift reflects higher inflation expectations over the next three years compared with the previous SEP, offset by slower-than-expected growth and higher unemployment.

The FOMC said in its statement that uncertainty had diminished but remained elevated. Powell noted that tariff uncertainty peaked in April ahead of the first tariff announcements and since then, the outlook has become only marginally clearer.

"Today, the amount of the tariff effects -- the size of the tariff effects, their duration and the time it will take -- are all highly uncertain," Powell said. "So that is why we think the appropriate thing to do is to hold where we are as we learn more. And we think our policy stance is in a good place where we're well-positioned to react to incoming developments."