Powell warned that new tariffs could drive up 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 rising 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 his concern about the potential chain reactions of tariffs on the real economy, rather than mere theoretical speculation.

He also stated that the Federal Reserve would 'stay on the sidelines,' reflecting a cautious approach to monetary policy. The primary responsibilities of the Federal Reserve are to maintain price stability and promote employment. If tariffs lead to soaring inflation, the Federal Reserve may need to raise interest rates to cool the economy; but if economic growth slows, it may need to cut rates to stimulate the economy. These two possibilities make the policy outlook 'highly uncertain,' as Powell mentioned. Therefore, his choice to remain on the sidelines may be an effort to wait for more data to come out, avoiding premature actions that could disrupt the market.

The phrase 'beyond expectations' is quite interesting. Trump's tariff policy may be more aggressive in scale or scope than the Federal Reserve anticipated, catching Powell somewhat off guard. However, he emphasized the 'risk of persistent inflation,' suggesting he is more concerned about losing control over inflation 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 Federal Reserve's task of controlling inflation more challenging.

In my view, Powell's position is quite pragmatic. He did not directly criticize the tariff policy (after all, the Federal Reserve aims to remain neutral) but focused on its economic consequences, reminding everyone where the risks lie. At the same time, he is not in a hurry to state specific countermeasures, demonstrating a clear understanding of the complex situation. However, if tariffs are indeed implemented on a large scale, it raises the question of how long his 'wait and see' strategy can hold. The market and the public may push the Federal Reserve for a clear signal, and just watching may not be enough by then.