FED CHAIR POWELL LINKS TRUMP’S TARIFFS TO INFLATION, WEAK JOB GROWTH
Washington, D.C. – Federal Reserve Chair Jerome Powell has directly tied President Donald Trump’s sweeping tariffs to rising inflation and signs of weaker job growth in the U.S. economy.
Speaking at an economic conference, Powell said the new trade duties are “significantly larger than expected” and their effects are beginning to show up in higher consumer prices and slower hiring.
Powell warned that while some of the price shocks could fade over time, tariffs risk embedding inflation more deeply into the economy — pushing up wages, production costs, and household expenses. That, he said, complicates the Fed’s efforts to bring inflation back to its 2% target.
At the same time, Powell noted that businesses are scaling back investment and hiring plans, raising concerns about the health of the labor market. Recent reports already point to a cooling in job creation, with some sectors hit harder by rising input costs.
The Fed chief stressed that policymakers will move cautiously on interest rates until there is a clearer picture of how long the tariff-driven inflation surge might last. He also warned that the U.S. faces the risk of “stagflation” — a scenario where prices continue to rise even as economic growth slows.
Powell’s comments mark one of his sharpest acknowledgments yet of the economic fallout from President Trump’s trade policies, which have triggered heated debate in Washington and uncertainty across global markets.
