Fed, Powell: duties will increase inflation, clash with Trump on rates
Fed's Powell predicts Trump's tariffs will increase inflation and slow economic growth. Open clash with US president.
2' min read
2' min read
Powell: duties will increase inflation, let's wait to act on rates
Federal Reserve Chairman, Jerome Powell, said he expects the tariffs decided by US President, Donald Trump, will increase inflation and slow economic growth.
For this reason, the US central bank will not change interest rates until it has a clearer picture of their impact, he said during a public speech. Powell did, however, say that the economy "is strong right now" and growth "solid".
There is 'the risk of higher unemployment and higher inflation', a 'difficult situation for a central bank', Powell said again, during a public speech. "If the Fed detects a tension between the two objectives," i.e. maximum employment and price stability, "we will have to assess how much action will be needed" on each, "and that is a difficult decision." "At the moment, the Fed does not detect a tension between the two objectives, this is not the 1970s," he concluded.
It is therefore an open clash with US President Donald Trump, who shortly before had spoken out on his social Truth, calling for a cut in interest rates.
Trump: pressure on Powell, perfect time to cut rates, stop playing politics
"This would be the perfect time to cut rates for Fed Chairman Jerome Powell. He is always 'late' but could now change his image quickly'. US President Donald Trump wrote this on Truth. "Energy prices are down, inflation is down, with egg prices down 69%. Jobs are rising. Jerome, cut interest rates and stop playing politics," Trump added.
