US Fed Chair Powell warns Trump’s tariffs could fuel inflation and slow growth
Federal Reserve Board Federal Reserve Chairman Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting in Washington, U.S., Nov. 07, 2024. (AFP Photo)
United States Federal Reserve Chair Jerome Powell warned Friday that U.S. President Donald Trump’s recent tariff increases could drive up inflation, slow economic growth, and heighten the risk of unemployment.
“It is now becoming clear that the tariff increases will be significantly larger than expected,” Powell said in prepared remarks at an event in Virginia.
“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he added, stressing that it was “too soon” to consider adjusting U.S. monetary policy.
Trump signed an executive order Wednesday, fulfilling his long-standing pledge to impose reciprocal tariffs on nations worldwide. The tariffs, ranging from 10% to 50%, apply to products the U.S. imports from many of its trading partners.
His comments suggest the Fed is in no rush to cut its benchmark lending rate, which remains at 4.25% to 4.50%, as it continues efforts to bring inflation down to its long-term 2% target.
‘Cut interest rates, stop playing politics’
Trump’s announcement earlier this week of sweeping tariffs on key trading partners has unsettled global markets, raising fears of higher import costs on goods ranging from shoes to shrimp.
However, ahead of Powell’s speech, Trump took to Truth Social to double down on his trade policy and urge the Fed to act.
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut interest rates,” Trump wrote. “He is always ‘late,’ but he could now change his image, and quickly.”
“CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” he added, reviving his long-standing criticism of Powell, whom he nominated as Fed chair before later turning against him.
