• Inflation may rise and a lot may slow down As a result of President Donald Trump’s introductory policies, according to Federal Reserve Chairman Jerome Powell. During a speech on Wednesday, Powell said that the highest Federal Reserve goal is to maintain price increases from Trump’s tariff limited to one time, so inflation does not remain.

Federal Reserve Chairman Jerome Powell has seemed to be his strongest warning so far about President Donald Trump’s influence on indirect definitions.

Powell said on Wednesday during a speech at the Economic Club in Chicago: “The level of increases in the tariff that has been announced so far is much greater than what was expected, and it is likely that the same applies to economic effects, which will include high inflation and slower growth,” Powell said on Wednesday during a speech at the Economic Club in Chicago.

Powell said that the customs tariff would raise inflation and slow growth, as he repeated the confirmation of the point he made it clear earlier this month. They also highly weighing the expectations that companies and consumers had the economy.

“Families and companies’ polls have reported a sharp decrease in feelings and high uncertainty about expectations, which greatly reflects commercial policy fears,” Powell said.

Powell added that the economy has now faced “increasing risks on the negative side” – a blatant recognition of a possible economic contraction of the role that usually has the President of the Federal Reserve.

At the time since Powell The latest comments Earlier this month, the White House retreated and then revitalized many parts of the widespread tariff policy. It is worth noting that Trump Temporarily Definitions were announced on April 2 for each country With the exception of ChinaWhich was struck with additional drawings. Then he gave his administration Exemptions For some products such as smartphones and semi -conductors, until Trump personally enters A reverse path On these exemptions. Creating the fixed back and back back of the uncertainty for companies and investors, many of whom still reeling from the tariff of the market that Trump caused.

Powell saw that the “very likely” definitions would raise the prices, but the main question that the Federal Reserve was still evaluating is the time it would continue.

He said: “Our commitment is to maintain long -term inflation expectations, and to ensure that one time increase in the price level does not become a problem with continuous inflation.”

One of the main measures that the backup watches in its evaluation of the economy are long -term inflation. If this rises, this means that business leaders, investors and the public in general see that inflation represents a chronic problem that will not disappear. When this happens, they are more likely to spend, which only raises the possibility of stagnation.

The latest March consumer price index report was measured by 2.4 %, slightly lower than expected. However, this reading came before Trump’s implementation of the tariff policy.

Since Powell spoke the last time, the economic turmoil of Trump’s definitions has made its way from the stock market to Bond market. The revenues on the treasury bonds increased for 10 years and 30 years at the same time as American and international stocks revolve around them. This gave an indication that the fearful investors were withdrawing their money from the stocks, and instead of standing in the American bonds, which are the safest investments in the world, it was in reality. sale Those assets as well. These dynamics indicated an unprecedented shortage of believing in the American economy.

“There is no modern experience in how to think about this,” Powell said about the recently implemented tariff policy.

The movements in the bond market were unusual, according to Loilel, who warned against beware of jumping into conclusions about their cause.

“Powell said: “They are the markets that address unique developments historically and with great uncertainty. I think you will likely witness continuous fluctuation, but I will not try to be specific about what exactly causes this,” Powell said.

As usual, Powell did not raise his hand about the movements of the upcoming monetary policy or whenever they will happen. Instead, Powell said that the relative power of the American economy had bought the Federal Reserve time before the need to make a decision.

“At the present time, we are in a good position to wait for more clarity before considering any amendments to our position on politics,” he said.

Trump’s tariff is almost certainly raising the prices of companies and consumers, which hinders the efforts of the Federal Reserve for years to reduce inflation. In this scenario, there may be justified interest rates. However, this will be a reflection of the price reduction course that the Federal Reserve has been since September. At the same time, there is a justification for price cuts if the American economy enters stagnation. The worst scenario is the recession, which is when inflation is high but the economy does not grow. Powell Powell defined this scenario as a “challenge” in which the goals of the dual Federal Reserve will be for full employment and stable prices “in tension.”

“It is a difficult place for central banks,” said Powell.

In short, the scope of the results for the Fed’s Reserve Bank may expand, or should only do.

The market currently ranges between two and three price cuts in 2025, starting from the second half of the year. But these plans may be subject to change due to the fluctuations of things through the economy.

Powell said: “The markets are struggling with a lot of uncertainty, and this means fluctuation.”

This story was originally shown on Fortune.com

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2025-04-16 19:44:00