Federal Reserve Chair Jerome Powell addressed Harvard University students Monday, discussing monetary policy and economic conditions amid ongoing geopolitical tensions.

Powell said the Federal Reserve can "wait and see" how current military conflicts affect inflation, indicating the central bank does not need to take immediate action in response to geopolitical developments. He emphasized that longer-term inflation expectations remain anchored despite recent global events.

The Fed chair told students not to lose hope despite challenging job market conditions. His remarks came as policymakers continue to assess economic data and determine the appropriate course for interest rates.

Powell indicated that oil price shocks from the conflict do not necessitate immediate rate hikes, suggesting the Fed sees current inflationary pressures as manageable. This stance aligns with recent market movements, as bond traders have renewed bets on potential rate cuts later this year.

Separately, Fed Governor Adriana Kugler expressed support for interest rate reductions, suggesting rates could decline by approximately one percentage point over the course of the year. Her comments reflect ongoing debate within the Federal Reserve about the timing and magnitude of potential policy adjustments.

The Federal Reserve has been balancing inflation concerns against employment goals while monitoring how international developments might affect the U.S. economy. Powell's Harvard appearance provided insight into current Fed thinking on these competing priorities.