“I think that’s kind of the base case,” he said, stressing the central bank can’t really know the total impact tariffs will have on the economy yet. 

Still, the last time Powell called inflation transitory was during the early days of the pandemic, and he was wrong. Inflation only got hotter and hotter, and consumer prices hit a four-decade high. The central bank was repeatedly criticized for not acting fast enough. At one point, Powell himself said it was time to retire the term after it became clear the rapid increase in prices wasn’t going away. 

During Wednesday’s press conference, Powell said the Fed is well aware of what happened with pandemic-era inflation, but the situation is different because tariffs could be a one-time shock to prices that resolves itself. Treasury Secretary Scott Bessent recently said, “I would hope that the failed team transitory could get back together and think that nothing is more transitory than tariffs,” while commenting on Fed policy. 

But Powell’s acknowledgment hasn’t stopped economists from digging up old memories. 

“I would have thought that, particularly after the big policy mistake of earlier this decade and given all the current uncertainties, some Fed officials would show greater humility,” Mohamed El-Erian, president of Queens’ College at the University of Cambridge, wrote on X. “It’s simply too early to say with any regress of confidence that the inflationary effects will be transitory, especially given that companies and households still have fresh in their minds the recent history of high unanticipated inflation.” El-Erian has been a vocal critic of the Fed. 

Ignoring past decisions, there could still be a threat to the central bank’s wait-and-see approach. After all, President Donald Trump’s tariff policies are ever-changing. 

“The risk is that tariffs could have a longer-lasting effect on inflation if additional tariffs are added later this year, or if tariffs push up inflation expectations and wage expectations,” Apollo Chief Economist Torsten Slok told Fortune in an email statement.

But others understand the Fed’s stance and believe there is a chance Powell could be correct this time around. 

“Tariff-induced inflation is likely to be more transitory than not, but it is impossible to know this with any confidence,” Moody’s Chief Economist Mark Zandi told Fortune in an email. “The key to how transitory or not the tariff-induced inflation will be is inflation expectations.”

Higher inflation expectations are already on the rise because of tariffs, Zandi explained. If that trend continues, tariff-fueled inflation will be more persistent and force the central bank to hold interest rates higher for longer. 

“But because there is no way to know, the appropriate response from the Fed is to sit on its hands, hold rates unchanged, and wait to see how the trade war and its fallout play out,” Zandi said. 

Trump has a different suggestion for the central bank: Cut interest rates now. The Fed would be better off cutting interest rates while tariffs work their way into the economy to ease the transition, he wrote on his social media platform Truth Social following the Fed’s decision to keep rates unchanged. Trump wants lower interest rates to keep his promise to Americans to bring down borrowing costs. Nothing Powell said on Wednesday indicated he is ready to cut interest rates.