US Federal Reserve Chair Discusses Impact of Trump Tariffs on Inflation
(MENAFN) US Federal Reserve Chair Jerome Powell remarked on Friday that the reciprocal tariffs introduced on Wednesday were "larger than expected" and would likely lead to increased inflation and slower economic growth.
"We have emphasized that it will be quite challenging to determine the potential economic impact of higher tariffs until more clarity is available regarding specifics, such as which goods will be taxed, the tax rates, the duration, and the level of retaliation from our trade partners," Powell stated during a conference in Virginia.
Powell highlighted that the scale and duration of the consequences from these tariffs are still unclear, but they will probably result in a temporary surge in inflation. He also noted that the effects might last longer than anticipated.
He pointed out that the higher tariffs are possibly to push inflation up in the upcoming quarters and remarked, "Reflecting this, both survey- and market-based measures of near-term inflation expectations have increased."
"By most measures, longer-term inflation expectations—those beyond the next few years—remain well anchored and consistent with our 2 percent inflation goal. We remain committed to returning inflation sustainably to our 2 percent objective."
Powell emphasized that the Fed would not rush into making decisions on monetary policy, stating, "It is too early to determine the appropriate course for monetary policy."
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