Powell Reveals Trump's Tariffs Exceeded Estimates

Federal Reserve Chair Jerome Powell stated that the tariffs imposed by President Donald Trump were significantly larger than forecasters, including the Fed, had anticipated, leading to increased uncertainty in economic outlooks. At the Economic Club of Chicago, Powell emphasized the challenges these unexpectedly large tariffs pose for monetary policy and economic stability, noting their potential to slow consumer spending and negatively affect GDP estimates. Despite these pressures, Powell reiterated that the U.S. economy remains on solid footing for now but acknowledged growth has slowed in recent quarters. He also highlighted that the Fed is prepared to take a patient approach, waiting for greater clarity on the effects of tariffs and other policy changes before adjusting interest rates. The resulting market volatility, including declines in cryptocurrency values, reflects the uncertainty faced by investors amid these evolving trade policies. Fed officials remain divided on whether the impact of these tariffs will be temporary or could risk pushing the economy toward recession.