Powell's Warning: Navigating Economic Uncertainty Amid Trump's Tariffs

Federal Reserve Chair Jerome Powell warns of potential economic challenges following President Trump's announcement of new tariffs. While seeking to anchor inflation expectations, Powell highlights tensions between current economic data and future projections amid global market declines and growing trade disputes.

Federal Reserve Chair Jerome Powell has expressed concerns about the economic impacts of President Donald Trump's recent tariff announcements, describing them as "larger than expected." In a speech in Arlington, Virginia, Powell noted that these tariffs could lead to higher inflation and slower economic growth, complicating the Federal Reserve's monetary decisions.

Powell's comments come amidst a downturn in global markets, which have seen a significant drop since the tariffs were introduced. Although Powell did not directly address these losses, he acknowledged the widespread uncertainty affecting investors and the Federal Reserve. The central bank plans to monitor the situation closely before deciding on any monetary policy adjustments.

With Trump's tariffs potentially causing a persistent increase in inflation, Powell emphasized the importance of maintaining anchored inflation expectations. He indicated that the Federal Reserve's focus would be on understanding the economic effects of the tariffs, including potential slower growth and price increases.

(With inputs from agencies.)