Fed Warns Trump's Tariffs Likely to Increase Inflation, Slow Growth

Federal Reserve Chair Jerome Powell warned that President Donald Trump's new tariffs could lead to higher inflation and slower economic growth, suggesting the Fed is not inclined to cut interest rates despite Trump's urging. Trump has publicly pressured Powell to reduce rates, arguing that it would benefit the economy amid a significant drop in stock markets following the tariff announcements. The tariffs have resulted in major US stock indexes experiencing substantial losses, with the Dow Jones, Nasdaq, and S&P 500 all suffering their worst single-day losses since 2020. Meanwhile, the Reserve Bank of India might consider cutting its policy repo rate to counteract the potential negative impact of the tariffs on economic growth. Powell emphasized the need for the Fed to keep long-term inflation expectations anchored, indicating a cautious approach to any monetary policy changes. Despite Trump's insistence, the Fed appears to be taking a wait-and-see approach, awaiting more data before making any decisions.