Federal Reserve Chair Jerome Powell hinted the growing risk of higher inflation and slower growth tied to unexpectedly large trade tariffs rolled out earlier this month by the Donald Trump administration.
In remarks delivered Wednesday at the Economic Club of Chicago, Powell said that growth has softened in the first quarter of 2025, while inflation is “still running a bit above our 2% objective.”
The Fed Chair highlighted that surveys from households and businesses showed a notable deterioration in sentiment.
Uncertainty around trade policy has been the dominant driver, causing many forecasters to cut their full-year outlooks. Nevertheless, most estimates still point to moderate, positive growth ahead.
“The new administration is in the process of implementing a substantial policy changes in four distinct areas: Trade …