Tariffs could create more enduring inflation pressures, requiring close monitoring.
FinTech BizNews Service
Mumbai, August 25, 2025: U.S. Federal Reserve Chair Jerome Powell indicated that a rate cut could be on the table at the September policy review, while carefully avoiding any firm commitment. His remarks highlighted the Fed’s balancing act - signs of a cooling labor market on one side, and persistent inflation risks on the other. The central bank has kept interest rates in the 4.25–4.50% band since December, and while a cut could support growth, ongoing tariff reforms add complexity, as they may bring in inflationary pressures, feels Sidhanth Paul, Research Analyst at Capitalmind PMS.
The upcoming U.S. employment and inflation data, due in early September, will be crucial in shaping the decision. He noted that while the labor market appears “in balance,” this balance comes from slowing demand and supply of workers, raising downside risks to employment. At the same time, tariffs could create more enduring inflation pressures, requiring close monitoring. Asian equities opened stronger, tracking Wall Street’s rebound. When it comes to the Indian markets, apart from the IT sector which is showing some reversal in sentiment on the back of expected low interest rates in the US, the broader market remains cautious and continues to be in ‘wait-and-watch’ mode, with its primary focus on the Aug 27 tariff deadline and the GST rationalization expected late next month, according to Sidhanth Paul.
