#PowellRemarks Federal Reserve Chair Jerome Powell on Wednesday cautioned that the central bank could face a "challenging scenario" of managing both accelerating inflation and a slowing economy brought on by the impact of President Trump's tariffs.

In written remarks at the Economic Club of Chicago, Powell reiterated that the Trump administration's tariffs are "significantly larger than anticipated."

"The same is likely to be true of the economic effects, which will include higher inflation and slower growth," he added.

Even so, Powell said the Federal Reserve can stay patient and wait to see how tariffs and other economic policies of the Trump administration play out before making any changes to interest rates. The sharp volatility in financial markets since Mr. Trump announced sweeping tariffs April 2, only to put most of them on hold a week later, has led to speculation about whether the Fed would soon cut its key interest rate or take other steps to calm investors.