Federal Reserve Chair Jerome Powell warned that inflation must be closely monitored amid rising energy prices caused by the Iran conflict.
Speaking at Harvard University, Powell noted that while energy shocks are typically short-lived, a series could influence long-term inflation expectations. He emphasized the importance of monitoring price setters and households' expectations.
Powell also addressed challenges facing recent graduates, citing AI's growing role in the workforce and weak job creation. Despite low unemployment at 4.4%, hiring has been sluggish, especially since early 2025.
He expressed optimism about long-term economic growth, stressing that technological advancements historically boost productivity and living standards.
Powell reiterated the necessity of Fed independence, rejecting political pressure from President Donald Trump, who has pushed for rate cuts. Trump has threatened legal action over the Fed’s building renovation project, which now estimates a cost of $2.5 billion-$600 million above previous projections.
Inflation remains a key concern for the Fed as global tensions and domestic policies shape economic outcomes.