Jerome Powell Addresses Economic Uncertainty Amid Trump's Tariff Shifts

Federal Reserve Chair Jerome Powell highlighted the potential economic risks posed by President Trump's tariffs, noting a potential drift from the Fed's inflation and employment goals. While market volatility is seen as a response to trade policy shifts, Powell stresses the Fed's independence and careful data monitoring before altering interest rates.

Federal Reserve Chair Jerome Powell highlighted on Wednesday the economic uncertainties influenced by President Trump's tariff strategies, indicating potential challenges for the Fed's goals on inflation and employment. Speaking at the Economic Club of Chicago, Powell emphasized the importance of assessing further data before making interest rate adjustments.

Powell described the recent market fluctuations as normal reactions to Trump's trade policy shifts, which are creating volatility but do not necessarily warrant immediate Fed intervention. He noted that tariffs could elevate prices while weakening growth, possibly moving inflation and employment off the Fed's targets.

Despite the pressure from unpredictable trade policies, Powell affirmed the independence of the Fed in setting monetary policies devoid of political influence. He stressed the ongoing vigilance in monitoring economic indicators to maintain stability, as the Fed measures the long-term effects of tariffs on the U.S. economy.

(With inputs from agencies.)