Trump tariffs complicate Fed outlook

Business & Economy

The Big Story

Fed sees inflation threat in Trump tariffs

Federal Reserve Chair Jerome Powell warned Wednesday that President Trump’s new tariffs will likely make it harder for the central bank to bring prices down.

While Powell did not mention the president by name, he told reporters Wednesday that the Fed is bracing for import taxes to impede its fight against inflation.

“I do think with the arrival of the tariff inflation, further progress may be delayed,” Powell said.

He pointed out that a new Fed economic forecast released Wednesday “doesn’t really show further downward progress on inflation this year, and that’s really due to the tariffs coming in.”

Powell’s comments came after the Federal Open Market Committee, the Fed panel responsible for setting interest rates, declined to bring down borrowing costs after a two-day meeting in Washington.

The Fed was widely expected to keep rates steady despite mounting concerns about the state of the economy and the impact of Trump’s trade agenda.

Powell described economic uncertainty as “unusually elevated,” which poses a challenge to the Fed as it attempts to get ahead of potential price increases.

Read the full report at TheHill.com.

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