Powell says tariffs will cause inflation and it may last.
Storch Advisors CEO and former Toysrus and Target executive Gerald Stouch said it’s time to encourage quick negotiations on tariffs and take action on tax cuts and deregulation.
Federal Reserve Chairperson Jerome Powell At a meeting Friday, President Donald Trump’s tariffs are likely to increase inflation and slow economic growth.
President Trump On Wednesday, it announced a sweep fee plan that encouraged the stock market to be sold and retaliated from its US trading partners. The S&P 500 fell by about 4% on Friday, down more than 6% over the last five days, but the Dow Jones Industrial Average entered the territory of corrections, surpassing 10% from its record high in December.
“It is difficult to predict the impact of tariffs on tariffs and other economic indicators,” Powell said in a statement at a meeting Friday.
“Uncertainty continues to rise, but it is becoming clear that tariff increases will be significantly greater than expected, and the same is likely to be the case with economic impacts, including higher inflation and slower growth,” he explained. “The size and duration of these effects remain uncertain.”
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Federal Reserve Chairman Jerome Powell said tariffs are likely to increase inflation at least temporarily. (Anna Money Maker/Getty Images/Getty Images)
“Taxes are likely to generate at least temporary,” Powell said. Inflation risesit could also be more permanent. ”
“While avoiding that outcome depends on maintaining well-analysed long-term inflation expectations on the magnitude of the effect and how long it takes them to pass fully to the price,” he said. “Our duty is to fix long-term inflation expectations and ensure that one-time price levels rise does not become an ongoing inflation problem.”
Inflation stubbornly surpasses the Fed’s 2% target rate, with the latest consumer price index (CPI) data at 2.8% in February, a central bank’s priority metric Personal Consumption Expenses (PCE) Index, 2.5%.
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President Trump announced swept tariffs on April 2 as part of his “liberation date” announcement. (Chip Somodevilla / Getty Images / Getty Images)
Powell was asked during a question and answer session following his speech at the Association to advance the annual Business Editing and Writing Conference in Virginia The role of the Fed A period of economic uncertainty caused by turbulence in financial markets and political policy.
“We are driven by analysis, careful thinking, debate and debate and debate, and the merits of things. We try to stay as much as we can from the political process. We don’t see the political cycle or anything like that.”
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Taxes are taxes on imported goods paid by imported companies, often passing higher costs to consumers at higher prices. (Photographer: Getty Images/Sam Wolf via Getty Images/Bloomberg)
“We don’t want to be part of a broader discussion of policy wisdom that is not assigned to us, and we are not responsible. Trade Policy“Immigration policy, fiscal policy,” he said.
“Over time, I like to think that we are a source of gentle, rational analysis and stability,” Powell added. “The business we are in offers Financial and macroeconomic stability In general, that’s really our purpose. ”
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The Fed’s next policy meeting took place in May, and Powell said he “feels that there’s no need to hurry” in terms of central bank interest rates.