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 rising prices, which is inflationary pressure. Furthermore, if other countries impose retaliatory tariffs on U.S. goods, U.S. exports may be hampered, further dragging down economic growth. Powell mentioned these risks, indicating that he is concerned about the potential ripple effects of tariffs on the real economy, rather than just theoretical speculation.

He also said the Fed would 'stay on the sidelines,' reflecting a cautious attitude towards monetary policy. The Fed's main responsibilities are to maintain price stability and promote employment. If tariffs lead to soaring inflation, the Fed 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 stated. Therefore, his choice to stay on the sidelines may be to wait for more data to come out, to avoid taking 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 had anticipated, catching Powell a bit off guard. However, he emphasized the 'risk of sustained inflation,' also suggesting that he is more concerned about inflation spiraling out of control than about 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, it is questionable how long he can maintain this 'wait and see' strategy. The market and the public may urge the Fed to give a clear signal, and at that time, merely watching may not be enough.