Trump’s tariffs are likely to lead to a temporary increase in inflation”: Fed’s Powell
The “Big Money Show” panel describes Federal Reserve Chair Jerome Powell’s warning about the impact of tariffs on inflation.
Federal Reserve Chairman Jerome Powell on Wednesday said the central bank could face a “challenging scenario” as if it were to contest the president. Donald Trump’s Customs duty.
Powell said the US trading partner obligations imposed by the White House were “significantly greater than expected” and likely led to a temporary increase in inflation.
“We may find ourselves in a challenging scenario where the goals of dual mandart are tense,” Powell said in preparation for the Chicago Economic Club. “If that happens, we’ll consider how far we’ve gone. economy From each target, potentially different time visions that are expected to close each gap. ”
Federal Reserve Chairman Jerome Powell will speak at a press conference in Washington, D.C. (Alex Wong / Getty Images / Getty Images)
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The Fed chair also said the central bank will wait for more data on the direction of the economy before changing interest rates.
“For the time being, we are well positioned to wait for more clarity before we consider adjusting to policy stance,” Powell said. His remarks point to the development of a potentially tough situation for the Fed, whereas growth and potentially jobs are weakening, while tariffs drive higher inflation.
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The outlook has become very uncertain, Powell said, There are “basic changes” in policy and do not provide clear similarities to business and economists to study.
However, in his first public remarks on recent financial volatility, Powell said he felt that bonds and stock markets were working well, and that fluctuations in security values indicate investors stock new landscapes.
Main Entrance to the Board of Directors of the Mariner S. Eccles, Washington, DC (Smith Collection/Gad/Getty Images/Getty Images)
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I was asked if there was.”I’ll feed“Where central banks intervene in if the market plummets, Powell said, “No, have an explanation… the market is handling what’s going on… the market is suffering from a lot of uncertainty, which means volatility. But that said, the market is working… conditioned on such a challenging situation, the market is doing what they should do. They are orderly and they are pretty much working, as you’re expected to work.”
“Powell confirms that investors are worried. That’s the possibility of slowing economic growth and stubborn inflation as a result of tariffs. Essentially, he says it’s still a free situation.”
NASDAQ composites were the brunt of losses on Wednesday, falling more than 3%, with Tesla, Starbucks and Amazon among the biggest losers.
In Technology Stock, the S&P 500 fell by more than 2%, but consumer discretion and telecom stocks also fell.
The Dow Jones industrial average fell 699.57 points (1.7%), led by Amgen and Apple, with Chevron and travellers below selling. Energy stock recorded moderate profits as oil rose above $62 per barrel mark.
Reuters contributed to this report.