Jerome Powell sounds warning on Trump’s tariffs: ‘Highly likely’ to raise prices, ‘continued volatility’ in the markets, and the looming threat of stagflation

• Inflation could climb and growth could be slow As a result of the tariff policy of President Donald Trump, according to Federal Reserve Chair Jerome Power. On Wednesday, Powell said that the main goal of Fed was to increase the prices of Trump’s rates, which was limited to a one-time event, so inflation is not left.

The Dederal Reserve Chair Jerome Powell sounded its strongest warning, which is still about the influence of President Donald Trump, again tariffs.

“The rate of raising the tariff announced so far is larger than predicted, and the same applies to economic consequences, which will include during the speech at the Chicago Economic Club.

Tariffs will increase inflation and slow growth, Powell said that reaffirming the beginning of this month. They also greatly overcame businesses and consumers about the economy.

“Inquiries in households and business report a sharp drop in mood and high-quality uncertainty, mainly reflecting the concerns of commercial policy,” Powell said.

The economy has now collided with “raising down risks,” Powell added a possible economic decline for the Federal Reserve.

Since the time of Powell Latest Comments: At the beginning of this month, the White House was withdrawn, then processed many parts of its original tariff policy. Many a-syllable, Trump cease Tariffs announced on April 2 for each country Besides Chinawhich had been hit by additional charges. His administration was then awarded Exception Smartphones and semiconductors like certain products until Trump personally interfers Reverse Course: on that exclusion. Real Progress has set up a background of the uncertainty of enterprises and investors, many of which have still returned to Trump’s tariffs caused by the market accident.

Powell saw it as “highly possible” tariffs to raise prices, but the main issue of feeding was still evaluated how long they will last.

“Our commitment is that the longer the term inflation is anchored and make sure that once a price level does not become a continuous problem of inflation,” he said.

One of the main measurements, which gives its own assessments of the economy, is the expectations of long-term inflation. If that rise, it means business managers, investors and society, see inflation as a chronic problem that will not leave. When it happens, they are much more likely to reduce costs, which only increases the likelihood of decline.

The last CPI report has measured inflation by 2.4% in March, slightly lower than expected. However, that what I read came to his tariff policy by Trump.

As Powell last spoke, the economic turmoil’s economic turmoil made the road from the stock exchange to bond marketThe yield of a number of 10 years and 30 years of treasures increased at the same time, as the United States and the global stocks were a crater. This showed that frightened investors removed their money from shares, not parking in the US bonds, which were considered the most secure investments in the world. seller those assets too. This dynamics announced an unprecedented lack of faith in the US economy.

“There is no modern experience on how to think about this,” Powell said about the recent tariff policy.

According to Powell, the shifts in the bond market were unusual, which have caused cautioned on their conclusions.

HotspentIt is markets that cultivate historically unique developments and great uncertainty, “Powell said.

As usual, Powell did not prompt his hand on the steps of the upcoming monetary policy or when they happened. Instead, Powell said that the relative force of the US economy bought Fed Time before the need to make a decision.

“So far, we are well positioned to wait for greater clarity before taking into account the adjustments of our policy position,” he said.

Trump tariffs are almost confident in raising business and consumer prices, which will prevent Fed years of effort to reduce inflation. This scenario can be guaranteed. However, it would be inversely reduced by the cutting rate, Fed was from September. At the same time, the interest rate cuts will be fulfilled if the US economy has fallen into the fall. The worst case scenario is a ferry, which in case inflation is high, but the economy does not grow. Powell sets that special scenario as a “difficult” in which Fed’s double mandate will be fully employed and steady prices.

“It’s a difficult place for central banks,” said Powell.

In short, the scope of the results for Fed’s capabilities or should do it only expands.

The market is currently in 2025 between two and three interest rates, starting from the second half of the year. But these programs can be changed, given how unstable things are in the economy.

“Markets are fighting with a lot of uncertainty, and it means instability,” Powell said.

This story was originally shown Fortune.com