Federal Reserve Chair Jerome Powell warned Wednesday that the step increases in tariffs announced by President Donald Trump last month has introduced “a great deal of uncertainty” into the U.S. economic outlook.
Addressing reporters after the May Federal Open Market Committee meeting, the Fed Chair hinted that the central bank is increasingly concerned about rising risks to both of its congressional mandates: maximum employment and stable prices.
“The tariff increases announced so far have been significantly larger than anticipated,” Powell said.
He noted that if the tariffs are sustained, they could lead to higher inflation, weaker growth, and a rise in unemployment—directly undermining the Fed’s dual mandate.
This Is Not 2019
Powell underscored that monetary policy is now in a “good place” to remain on hold as the Fed awaits further clarity on how recent developments—including aggressive trade policy shifts—will affect the economy.
“We don’t think we need to be in a hurry. We are going to be watching the data. It may move quickly or slowly. But we’re well positioned to wait,” he said.
“We are in a good place to wait and see,” he added.
This marks a shift from past Fed …