Fed Chairman Omeerom Powell warned on Friday that President Donald Trump’s tariffs were likely to increase inflation higher, forcing investors’ hopes that the central bank would lower interest rates later this year.
“Higher tariffs will work through our economy and are likely to increase inflation in the upcoming quarters,” Powell said, speaking in Washington at a business journalism conference.
“It is now becoming clear that increasing tariffs will be significantly higher than expected, and that will probably be true for economic effects, which will include greater inflation and slower growth,” he said.
Powell noted that the current economy is strong, citing strong Job reports Posted on Friday. But he also said that the uncertainty of changes in the president’s policy makes consumers and business activities nervous and put the Fed in waiting and viewing mode. The report on job data was collected in front of several recent events that could have major economic repercussions, such as announcing for Trump’s “Liberation Day” tariffs, Powell acknowledged. As Trump’s Liberation Day announcement, Powell acknowledged.
This story was originally shown on Fortune.com
Source link
