Fed Chair Powell (Q&A) says Fed is waiting for tariff pass-through process to go through so goods returns to previous levels

• Disinflation is not coming from restrictive policy
• Also thinks its important to keep policy restrictive, Fed must balance risks
• Says Fed is in a difficult situation
• Policy is now in the right place to be

Fed Chair Powell's comments highlight the Fed's cautious stance while navigating tariff impacts on inflation. His emphasis on maintaining a restrictive policy suggests that the Fed is concerned about balancing economic risks, which could signal a prolonged period of tight monetary conditions. This may influence market expectations for future rate moves and cross-asset dynamics, especially within fixed income and FX markets.