Fed Chair Jerome Powell on Wednesday warned Donald Trump’s tariffs are expected to drive up prices and slow economic growth, potentially forcing the Federal Reserve to choose between curbing inflation and preserving jobs.
“Tariffs are highly likely to generate at least a temporary rise in inflation,” AFP quoted Powell as telling the Economic Club of Chicago, warning that the inflationary effects “could also be more persistent.”
“Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored,” he added, echoing similar remarks earlier this month.
Unlike many central banks, the US Federal Reserve operates under a dual mandate from Congress: to maintain stable prices and achieve maximum sustainable employment.
It manages these goals by adjusting interest rates to either stimulate or cool down economic demand.
Content retrieved from: https://www.firstpost.com/world/fed-chair-powell-warns-trump-tariffs-may-fuel-inflation-force-bank-into-tough-trade-off-13880579.html.
