#PowellRemarks Strong Warning from Fed Chair Powell
U.S. Federal Reserve Chair Jerome Powell made significant statements regarding the new tariff measures announced by President Donald Trump. Powell noted that the new tariff regime, declared by Trump on April 2 and set to take effect on April 5, could have a much greater impact on the U.S. economy than previously estimated, increasing both inflation and unemployment risks.
“Although uncertainty remains high, we now see that the tariffs may not only lead to a temporary price increase but also result in structural consequences that could slow down economic growth,” Powell said. Highlighting that the effects of the tariffs could be “permanent,” Powell emphasized that the Fed’s responsibility is to maintain long-term price stability and prevent this process from spiraling into uncontrolled inflation.
As part of Trump’s decisions, the total tariff rate on China will rise to 54%, while the European Union will face a 20% rate, Japan 24%, India 26%, South Korea 25%, Taiwan 32%, Thailand 36%, and Vietnam 46%. In retaliation, China announced it would impose an additional 34% tax on goods imported from the U.S. As the global trade war escalates, markets are growing increasingly uneasy.
Powell stated that these developments have increased uncertainty in financial markets and created a complex picture for Fed monetary policy. “If the economy slows down, a rate cut may be considered, but rising prices make this decision more difficult,” he said.
Trump, on the same day, took to the social media platform Truth Social and directly addressed Powell, saying, “Now is the perfect time to cut rates. Don’t be late!” continuing to apply pressure.