Powell and Ueda cautious as trade tensions persist
- Adam German
- Aug 6
- 1 min read
On August 1st, NHK World aired a piece comparing last week’s Fed and Bank of Japan interest rate decisions.
NHK World does now allow third-party sites to embed their videos so click on the screen grab below or here to watch on YouTube.
Key Takeaways:
The US Federal Reserve and the Bank of Japan both left interest rates unchanged this week, signaling caution amid ongoing global uncertainty.
Fed Chair Jerome Powell emphasized the need to watch economic data closely, noting that the full impact of Trump’s tariffs is still unclear.
Despite pressure from Trump to cut rates, Powell held firm—though two Fed governors appointed by Trump voted in favor of a rate cut, revealing rare internal disagreement.
Analysts say cutting rates too early could spark inflation and damage the Fed’s credibility, especially if it appears politically motivated.
The BOJ also opted for a “wait and see” approach, keeping its short-term rate at around 0.5% - unchanged since January.
BOJ Governor Kazuo Ueda pointed to lingering concerns over trade policy and Japan’s domestic political outlook.
Some business leaders in Japan are frustrated with the BOJ’s slow response to rising prices, and a rate hike by year-end is now considered likely.
Both central banks are walking a fine line - closely monitoring inflation, employment, and global trade shifts before making their next move.
