American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Latest News

Powell warns Trump’s steep tariffs may trigger higher inflation and slow US growth

by admin April 5, 2025
April 5, 2025
Powell warns Trump’s steep tariffs may trigger higher inflation and slow US growth

Federal Reserve Chair Jerome Powell has raised alarm over President Donald Trump’s sweeping new tariffs, warning that the economic impact could be more severe than anticipated — with inflation rising and growth slowing amid growing uncertainty.

Speaking at a conference of business journalists in Arlington, Virginia, Powell cautioned that the latest import taxes introduced by the Trump administration are “larger than expected” and could unleash a complex set of challenges for the US economy and the central bank.

The fresh tariffs — announced on Wednesday and targeting a wide array of global trading partners — have already roiled financial markets, erasing around 10% from major US stock indexes by Friday.

Powell said:

We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation.

This, he added, directly undermines the Fed’s dual mandate of price stability and maximum employment.

While Powell refrained from commenting directly on the sharp equity sell-off, his speech acknowledged the difficult choices ahead for monetary policymakers.

The Federal Reserve, he said, will remain focused on anchoring long-term inflation expectations while assessing the fallout from the tariffs.

Although initial impacts from tariffs typically lead to temporary price hikes, Powell warned the effects this time may be more persistent.

“Our obligation is to ensure that a one-time increase in the price level does not become an ongoing inflation problem,” he said.

The Fed, for now, will hold off on immediate action and continue monitoring incoming data.

“It is too soon to say what will be the appropriate path for monetary policy,” Powell stated, noting that the Fed is well-positioned to wait for greater clarity.

A key challenge for the central bank is reconciling strong “hard” data — like March’s 228,000 new jobs and 4.2% unemployment rate — with “soft” data such as business sentiment and surveys, which signal an economic slowdown ahead.

This divergence, Powell noted, could widen as the economic consequences of trade tensions unfold.

Markets have reacted sharply.

Investors now anticipate four quarter-point rate cuts from the Fed this year, up from three before Trump’s tariff move.

Some analysts estimate that average US import taxes could rise to as high as 27%, a significant increase from around 2.5% under the Biden administration.

The broader trade fallout also includes retaliatory measures from China. Beijing has imposed 34% tariffs on US goods, restricted mineral exports vital to the tech industry, and limited imports of American poultry — signaling rising geopolitical and economic tensions.

Other Fed officials echoed Powell’s concerns. Fed Governor Lisa Cook noted that inflation expectations had already started rising before Trump’s announcement.

Vice Chair Philip Jefferson warned that the uncertainty could hurt household and business spending, while Fed Governor Adriana Kugler added that early signs of stagflation — the toxic mix of stagnant growth and inflation — may be emerging.

As the central bank navigates this volatile environment, Powell made clear that taming inflation and protecting economic stability remain top priorities. But with tariff-induced headwinds mounting, the Fed’s task is becoming increasingly delicate.

The post Powell warns Trump’s steep tariffs may trigger higher inflation and slow US growth appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Adidas vs. Puma: how a sibling split in a small German town gave birth to a longstanding rivalry
next post
Why Nike shares are bucking the market trend with a 5% gain on Friday

Related Posts

EUR/USD forecast ahead of ECB decision, US NFP...

March 3, 2025

Red alert in Ireland: Storm Éowyn leaves 93,000+...

January 24, 2025

Scientists just set a nuclear fusion record in...

February 9, 2024

‘Artificial sun’ sets record for time at 100...

April 2, 2024

Putin says a Biden presidency is better for...

February 17, 2024

Trump’s war with the Federal Reserve: inside the...

April 21, 2025

Anesthetics, crutches, dates. Inside Israel’s ghost list of...

March 3, 2024

Israel targets Hezbollah commander in Beirut strike after...

July 31, 2024

Exclusive interview: ICC prosecutor seeks arrest warrants against...

May 22, 2024

Prehistoric marine reptile may have rivaled the blue...

April 19, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Kraft Heinz plans breakup, weighs $20 billion grocery spin-off: report

      July 13, 2025
    • Trump’s 50% tariff on Brazil imports to brew trouble for Starbucks and Dutch Bros

      July 13, 2025
    • US to announce 30% tariff on EU and Mexico says Trump

      July 13, 2025
    • Why India is rushing to build bigger banks and what’s standing in the way

      July 13, 2025
    • Wall Street braces for weakest earnings season since 2023 amid market highs

      July 13, 2025

    Categories

    • Business (3,408)
    • Investing (2,624)
    • Latest News (2,017)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved