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. Moreover, if other countries impose retaliatory tariffs on U.S. goods, American exports may suffer, 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 mere theoretical speculation.

He also stated that the Federal Reserve would 'wait and see,' 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 down, 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 an attempt to gather more data and avoid early 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 had anticipated, which caught Powell somewhat off guard. However, he emphasized the 'risk of sustained inflation,' also implying that he is more worried about inflation spiraling out of control 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 stance is quite pragmatic. He did not directly criticize the tariff policy (after all, the Federal Reserve tries to remain neutral), but focused on its economic consequences, reminding everyone of the risks involved. At the same time, he is not in a hurry to state specific measures, showing a clear understanding of the complex situation. However, if tariffs are indeed implemented on a large scale, how long he can maintain this 'wait and see' strategy is questionable. The market and the public may urge the Federal Reserve to provide a clear signal, and just waiting may not be enough.