Powell sees tariffs that increase inflation and say the Fed will wait before the next steps

Chairman of the Federal Reserve System Jerom Powell On Friday, he expected that President Donald Trump’s tariffs would increase inflation and less height, and said the Central Bank would not move at interest rates until he received a clearer picture on the final consequences.

In a speech addressed to Business Journalists in Arlington, Washington, Powell said the Fed is faced with a “very uncertain worldview” New mutual levies The president announced on Wednesday.

Although he said that the economy is currently strong, he emphasized the threat that the tariffs are creating, and noted that the Fed would be focused on inflation.

“Our commitment is to maintain long-term inflation expectations well secured and make sure that a one-time increase in prices does not become a constant inflation problem,” Powell said in the prepared remarks. “We can expect greater clarity before considering any adjustments to our political position. It is too early to say what the right way for the monetary policy will be.”

The comments came shortly after Trump called Powell To “stop playing politics” and reduce interest rates because inflation decreases.

Was Torrent sale on Wall -Rate After Trump’s announcement of 10% on the home tariffs, as well as the return payments menu, which are much higher for many key trading partners.

Powell noted that the announced tariffs were “much larger than expected.”

“The same thing that may be the economic consequences that will include higher inflation and slow growth,” he said. “The size and duration of these effects remain uncertain.”

While Powell has been given the Fed to respond to changes, pricing markets in an aggressive interest rate set starting in June, with the likelihood that the Central Bank would cut off at least the full percentage of its key borrowings by the end of the year CME GROUP Data.

However, the Fed is accused of maintaining inflation with full work.

Powell emphasized that in order to perform the inflationary side, his mandate will require the maintenance of inflation expectations in control, which could be difficult to make tariffs for lobbying Trump in US trading partners, some of which have already announced revenge.

Much attention to inflation can also scare away the Fed from weakening policies until it estimates what long -term tariffs will be on prices. Usually, politicians view tariffs as simply a temporary rise in prices rather than a fundamental inflation driver, but the broad character of Trump can change this perspective.

“While tariffs are likely to create at least temporary inflation, it is possible that the consequences may be more persistent,” Powell said. “The avoidance of this results will depend on the preservation of long -term inflation expectations, which are well fixed, the size of the effects and how much time it takes to fully move to prices.”

Main inflation In February, the run by 2.8% of the annual rate, part of the overall modernization, which, nevertheless, is still much higher than 2% of the Fed.

Despite the increased alarm over the tariffs, Powell said that the economy “still is still in a good place” with a hard labor market. However, he mentioned recent consumer polls that show increased concern for inflation and expectations for future growth, showing that long-term expectations are relevant.

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