Powell warned that new tariffs could raise inflation and slow economic growth, which makes sense. From an economic perspective, tariffs are essentially a trade barrier that increases the cost of imported goods. These costs are often passed on to consumers, leading to higher prices, which is inflationary pressure. Moreover, if other countries impose retaliatory tariffs on American goods, U.S. exports could be hindered, further dragging down economic growth. Powell mentioned these risks, indicating that he is concerned about the potential chain reaction of tariffs on the real economy, rather than mere theoretical speculation.

He also stated that the Federal Reserve would 'wait and see,' reflecting a cautious approach to monetary policy. The Fed's primary responsibility is to maintain price stability and promote employment. If tariffs lead to a spike in inflation, the Fed may need to raise interest rates to cool the economy; but if economic growth slows, it may need to lower rates to stimulate the economy. These two possibilities make the policy outlook 'highly uncertain,' as Powell said. Therefore, his choice to wait may be to gather more data and avoid premature actions that could cause market turmoil.

The phrase 'beyond expectations' is quite interesting. Trump's tariff policy may be more aggressive in scale or scope than the Fed anticipated, catching Powell somewhat off guard. But he emphasized the 'risks of sustained inflation,' suggesting that he is more concerned about inflation going out of control rather than a short-term economic slowdown. This may reflect the current economic environment—inflation is already a sensitive topic, and any additional push could make the Fed's task of controlling inflation more challenging.

In my view, Powell's stance is very pragmatic. He did not directly criticize the tariff policy (after all, the Fed tries to remain neutral), but instead focused on its economic consequences, reminding everyone of the risks involved. At the same time, he is not in a hurry to express specific countermeasures, showing a clear understanding of the complex situation. However, if tariffs are indeed widely implemented, how long he can maintain this 'wait and see' strategy is a question. The market and the public may urge the Fed to provide a clear signal, and at that point, merely waiting may not be enough.