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From 3h ago
16.43 BST
Fed's
Powell warns high inflation and slower growth could be here to stay, as Trump
tells him to cut interest rates
Meanwhile,
Jerome Powell has been speaking in Virginia.
Donald
Trump’s new tariffs are “larger than expected” and the economic fallout
including higher inflation and slower growth likely will be as well, the
Federal Reserve chair said on Friday in remarks that pointed to the potentially
difficult set of decisions ahead for the central bank.
Powell said
in prepared remarks for a business journalists’ conference:
We face a
highly uncertain outlook with elevated risks of both higher unemployment and
higher inflation. While tariffs are highly likely to generate at least a
temporary rise in inflation, it is also possible that the effects could be more
persistent.
Powell said
it was not the Fed’s role to comment on the Trump administration’s policies but
rather to react to how they might affect an economy that he and his colleagues
regarded just a few weeks ago as being in a “sweet spot” of falling inflation
and low unemployment.
As the new
policies and their likely economic effects become clearer, we will have a
better sense of their implications for the economy and for monetary policy.
While uncertainty remains elevated, it is now becoming clear that the tariff
increases will be significantly larger than expected. The same is likely to be
true of the economic effects, which will include higher inflation and slower
growth.
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