Powell Warns of Economic Uncertainty Amid Trump's Tariff Surge

Federal Reserve Chair Jerome Powell cautioned about the uncertain economic impact of President Trump's new larger-than-expected tariffs, which may result in higher inflation and slower growth. While stock markets were looking for reassurance, Powell emphasized the rising economic tensions and the Fed's cautious approach.

Federal Reserve Chair Jerome Powell has raised concerns over the economic consequences of President Donald Trump's newly announced tariffs, describing them as "larger than expected". The tariffs may trigger significant inflation and slower economic growth, according to Powell's remarks on Friday.

Speaking at a business conference in Arlington, Virginia, Powell highlighted the uncertainty surrounding the U.S. central bank's potential response. Investors, already rattled by a steep decline in global stock markets, hoped for assurances of rate cuts, but Powell stayed non-committal.

Powell emphasized the need for more data before making monetary policy decisions. The Fed's focus is on keeping inflation expectations stable, as tariffs could spark prolonged price hikes. The situation poses a challenge for the central bank's dual mandate of managing inflation and employment.

(With inputs from agencies.)