Powell warns tariffs likely raise persistent inflation, slow growth

Federal Reserve Chair Jerome Powell expressed concerns over the economic impact of President Trump's new tariffs, warning they are likely to raise inflation and slow economic growth more significantly than initially expected. In recent remarks, he acknowledged the potential for a temporary rise in prices, but also indicated that the effects could be more persistent, putting the Fed in a challenging position regarding interest rate policy. Despite a strong labor market, with 228,000 jobs added in March, Powell emphasized the uncertainty surrounding the tariffs' long-term effects on inflation and economic stability. The tariffs have already triggered a global market sell-off, leading economists to predict increased consumer prices and a possible recession. Powell's shift from a view of transitory inflation to acknowledging lasting impacts reflects the difficulties ahead for the Fed as it navigates inflation control while supporting growth. Overall, the situation presents a complex landscape for policymakers as they await clearer economic data.