Fed Chair Jerome Powell: Tariffs May Wreck Economy

The New York Times reports:

Jerome H. Powell, chair of the Federal Reserve, warned that President Trump’s tariffs risk stoking even higher inflation and slower growth than initially expected, as he struck a more downbeat tone about the outlook, despite the economy so far remaining in a “good place.”

“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” he said. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.” Mr. Powell characterized the risks of that outcome, which he warned could include higher unemployment, as “elevated.”

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” he said in a speech at a conference in Arlington, Va., on Friday.

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U.S. Federal Reserve Chair Jerome Powell says it is “difficult to assess” what the full economic effect of tariffs will be, but that “higher inflation and slower growth” are likely.

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— NewsNation (@NewsNation) April 4, 2025

BREAKING: Federal Reserve chair Jerome Powell says that bigger-than-expected tariffs will translate into higher inflation and slower economic growth — and that the higher inflation could be persistent, not temporaryhttps://t.co/eRxpMSMvaG

— Axios (@axios) April 4, 2025