Jerome Powell Warns of Inflation Due to Tariffs, Fed to Hold Rates
Federal Reserve Chairman Jerome Powell has raised concerns about the potential inflationary impact of new tariffs, signaling that the central bank will maintain current interest rates for the time being. Speaking at a recent economic conference, Powell highlighted the delicate balance between fostering job growth and controlling inflation, especially in light of recent tariff impositions.
The announcement comes as markets react to the latest jobs report, with President Trump celebrating the figures as a sign of robust economic health. However, Powell's cautious stance on inflation has led to a dip in market confidence, as investors weigh the implications of sustained high tariffs.
Analysts at CNBC and Bloomberg have noted the Fed's hesitance to adjust rates amid these economic uncertainties, with some suggesting that the central bank is preparing for a longer-term strategy to combat potential inflation spikes. This development marks a critical juncture for U.S. economic policy, as the administration and the Fed navigate the complex interplay between trade policy and domestic economic stability.
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Will tariffs affect inflation?
(AP) — The Trump administration's expansive new tariffs will likely lead to higher inflation and slower growth, and the Federal Reserve will focus on keeping price increases temporary, Fed Chair Jerome Powell said Friday.
Will tariffs raise interest rates?
Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump's tariffs to raise inflation and lower growth, and indicated that the central bank won't move on interest rates until it gets a clearer picture on the ultimate impacts.
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