Economic Shifts: Fed's Uncertainty Amid Trump's Trade Policies

Fed Chair Jerome Powell addresses the impacts of the Trump administration's import tariffs on the U.S. economy, highlighting slow growth, higher inflation, and the significant uncertainty they create. Despite solid employment data, the central bank remains cautious, maintaining interest rates while monitoring the evolving economic landscape.

Federal Reserve Chair Jerome Powell discussed the economic implications of the Trump administration's import tariffs, noting their role in slowing the U.S. economy and elevating short-term inflation rates. He expressed the uncertainty faced by policymakers amid these unprecedented changes.

Despite expectations to cut interest rates further by year-end, Powell emphasized the current economic unpredictability, citing weaker growth against burgeoning inflation, mainly due to trade policies. He noted a steady job market but highlighted potential long-term impacts on the economy.

Trump's tariffs, particularly against Mexico and Canada, could raise import tax rates to near historic peaks. Powell assured that the Fed is closely monitoring these developments, maintaining a cautious stance to manage potential inflationary pressures and unemployment rates effectively.

(With inputs from agencies.)