Federal Reserve Chair Jerome Powell stated that President Donald Trump’s new tariffs are "larger than expected," and their economic impact— including higher inflation and slower growth—could also be more severe.

Powell emphasized that the Fed is facing an uncertain outlook, as the new tariff policies could put long-term inflationary pressure on the economy. Meanwhile, U.S. stock markets have dropped 10% since Trump announced the new tariffs.

Although the Fed is not rushing to adjust monetary policy, it will closely monitor the impact of these tariffs. At the same time, China has retaliated with a 34% tariff on U.S. goods and restrictions on critical mineral exports, further escalating trade tensions.

Fed officials warn that inflation risks are rising while the economy shows signs of slowing, raising concerns about potential stagflation.

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