ARLINGTON, Va. — Federal Reserve Chairman Jerome Powell said Friday that global tariffs on President Donald Trump’s “liberation day” will lead to “inflation and growth” in the coming months.
“Taxes are likely to generate at least a temporary increase in inflation, but the impact could also be more sustained,” Powell told a conference of business journalists outside Washington.
Powell warned that the Federal Reserve Commission will wait to see how Trump’s tariff policies will be implemented to decide whether to adjust interest rates.
“For me, it’s not clear what the right path for monetary policy will be,” Powell said. “And before we start tweaking these things, we need to wait and see how this works.”
The Fed’s chairman squeezed the potential impact of tariffs two days after Trump revealed a series of obligations regarding imports from dozens of countries around the world, including longtime economic allies and small countries that mostly buy from the US.
“We stressed that it would be very difficult to assess the potential economic impact of higher tariffs, including what tariffs are, what level, what period, and the extent of retaliation from trading partners,” he said. “Uncertainty continues to rise, but it is becoming clear that tariff increases will be significantly greater than expected, and the same is likely to apply to economic impacts, including higher inflation. The scale and duration of these facts remain uncertain.”
Trump’s tariffs ranging from baselines of imports from Singapore to 46% of goods made in Vietnam, echoing through the economy, with stocks selling sharply on Wall Street on Thursday, worsening on Friday.
Powell spoke late Friday morning at the annual business editorial and writing meeting. This is a performance that was scheduled for Trump before he set up a “liberation day” tariff announcement at the White House on Wednesday.
