Fed won't 'begin thinking about thinking about a cut' until inflation from tariffs has peaked, economist says.

Federal Reserve Chair Jerome Powell will push back at his press conference on Wednesday on calls from the White House and many on Wall Street for interest-rate cuts, economists say.

The solid April jobs report didn't confirm the weakness seen in first-quarter growth, giving the Fed time to wait and see how the economy responds to the Trump administration's tariff plans.

"There was nothing in the [jobs] report that will get the Federal Reserve to leap off the sidelines next week and start cutting interest rates," said Scott Anderson, chief U.S. economist at BMO Capital Markets, in a note to clients.

Investors will be disappointed if they're hoping to get a sense from Powell about when the Fed might make that leap and cut rates.

Fundamentally, that's because the Fed itself is unsure.

It has been a long since anyone has seen a trade war likely to result in rising inflation, rising unemployment and slower growth at the same time. This is called stagflationary by economists and presents a diabolical dilemma for the central bank.

The duration of these effects will matter enormously to the central bank.

"My sense is that the Fed won't even begin thinking about thinking about a cut until it is absolutely certain that inflation is at or near its peak - whatever that's going to be following the tariffs," said Joe Brusuelas, chief economist at RSM, in an interview.

"And two, there are going to have to be real cracks in the labor market for the Fed to feel comfortable," he added.

Rate cuts, which have been the cure-all for the economy since 1980, are not the panacea this time.

"Cutting rates into rising prices will cause a deeper bout of stagflation," Brusuelas said.

The Fed's interest-rate committee meets Tuesday and Wednesday. The central bank is universally expected to hold rates steady in a range of 4.25%-4.5%. Powell will follow with a press conference at 2:30 p.m. Eastern on Wednesday.

Want to get a jump on Wednesday's press conference? Read Powell's April 16 speech.

Economists think it is likely that Powell will stick closely to the speech he gave last month, especially on how the Fed might handle the puzzle of higher inflation and higher unemployment.

"His April 16 speech is really the template for what this meeting looks like," said Brett Ryan, an economist at Deutsche Bank, in an interview.

Powell emphasized then that the Fed "is in no hurry to move," Ryan added.

In his speech, Powell explained that inflation was going to get more weight in the Fed's thinking in the coming months, by saying the labor market couldn't thrive if inflation was out of control.

"Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem," Powell said.

Unemployment may be higher, but is not expected to shoot too much higher above the 4.2% jobless rate that the central bank estimates is a healthy labor market.

Rate cuts could come starting in July-September

Traders in derivative markets now expect three rate cuts this year.

Brusuelas of RSM thinks the conditions for the Fed to cut will emerge sometime in the second half of the year. He sees two cuts but isn't wedded to a specific meeting for those to start.

Economists think two cuts will come in the latter half of the year. By that point, the economy will be in a a recession, Brusuelas said.

Ryan of Deutsche Bank predicted the Fed would cut for the first time in December.

"With the inflation risks where they are, you don't have the luxury of pre-emptively cutting," Ryan said.

Deutsche Bank isn't forecasting a recession, but it sees "barely positive growth," he added.

Anderson of BMO thinks the Fed will be able to cut rates in July.

"We are hoping there will be enough evidence of inflation weakening to offset any sort any big decline in the labor market. It is a big if," he said.

Anderson also isn't forecasting a recession.

"We're about as close to a recession call without having one," he said.

Even Fed Gov. Christopher Waller, who has been one of the most dovish officials on the central bank's board, thinks a move is unlikely in May or June.

"I don't think you're going to see enough happen in the real data is the next couple of months, until you get past July," Waller said.