Powell: Trump's Tariffs Could Worsen Inflation, Slow Economy

Federal Reserve Chair Jerome Powell has voiced concerns that proposed tariffs by former President Donald Trump could negatively impact the U.S. economy, potentially leading to increased inflation and slower growth. Speaking at a recent economic forum, Powell stated that the Federal Reserve is closely monitoring the situation and is prepared to take action to maintain price stability.

Powell emphasized the central bank's "obligation" to ensure that a "one-time increase in the price level does not become an ongoing inflation problem." He explained that the Fed's primary goal is to keep inflation at its target rate of 2%. Tariffs, which are taxes on imported goods, can raise prices for consumers and businesses, potentially fueling inflation.

Economists are divided on the potential impact of the proposed tariffs. Some argue that they could protect American industries and create jobs, while others fear they could harm international trade and lead to retaliatory measures from other countries. The Federal Reserve will continue to assess the economic outlook and adjust its monetary policy as needed to achieve its goals of full employment and price stability.