Trump tariffs ‘highly likely’ to lead to temporary rise in inflation: Fed’s Powell

Federal Reserve Chairman Jerome Powell said on Wednesday that the central bank may face a “difficult scenario” because it contradicts president Donald Trump’s tariff.

Powell said that the duties of commercial partners in the United States imposed by the White House are “much greater than expected”, and that they are “very likely” to lead to a temporary rise in inflation.

“We may find ourselves in the difficult scenario in which our double goals are tension,” Powell said in statements prepared for the Economic Club in Chicago. “If that will happen, we will consider the economy for every goal, and the various time prospects that are likely to be expected to be closed by those concerned gaps.”

Trams warning for consumers and companies at an association.

The Federal Reserve Chairman also said that the central bank will wait for more data about the direction of the economy before changing interest rates, because it aims to reduce inflation to its 2 % goal.

“At the present time, we are in a good position to wait for greater clarity before considering any amendments to our position on politics,” said Powell. His remarks noticed a difficult situation that is likely to be for the federal reserve in which inflation is pushed up from the customs tariff while weakening growth and possibly employment.

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Powell said that the expectations are now very unconfirmed, with “basic changes” in policy that does not provide companies and economists any clear similarities to study.

However, in his first general statements about recent financial fluctuations, Powell said he felt that bond and stock markets were working well, as security values ​​of investors who evaluate the new scene show.

The main entrance to the Marriner S. Eccles Federral Reserve building, in Washington, DC (Smith Collection/GADO/Getty Images/Getty Images)

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In response to a question about whether there is a “Federal Reserve Status” where the central bank will enter if the markets decrease, Powell said, “No, with an explanation … the markets are dealing with what is going on … the markets are struggling with a lot of uncertainty and this means fluctuation.

“Powell emphasizes what the investors felt, and this is the possibility of slowing economic growth and stubborn inflation as a result of definitions, saying mainly that the situation is still open.”

Nasdaq Composite carried the loss of losses on Wednesday, as it fell more than 3 %, with Tesla, Starbucks and Amazon among the largest losers.

Technology shares have led a decrease S&P 500 to more than 2 %, while estimated shares and consumer communications decreased.

The Dow Jones Industrial rate decreased 699.57 points, or 1.7 %, led by AMGEN and Apple, while Chevron and travelers collected the sale. Power shares have spread modest gains as oil rose above $ 62 a barrel.

Reuters contributed to this report.