Federal Reserve Chairman Jerome Powell said in a speech on Wednesday that he expects President Donald Trump's tariff campaign to drive up inflation.

Powell emphasized the risks of inflation and said the Fed would not necessarily intervene to help financial markets with lower interest rates if stocks decline.

Tariffs threaten to slow the economy while driving up inflation, putting the Fed in a difficult position because monetary policy tools can only help solve one of these two problems at a time.

The Fed appears to be preparing for a new wave of inflation as a result of President Donald Trump's tariff campaign.