On April 16, 2025, Federal Reserve Chair Jerome Powell addressed the Economic Club of Chicago, expressing concerns over President Trump's recent tariffs. He noted that these tariffs are more extensive than anticipated and could lead to higher inflation and slower economic growth. Powell emphasized the uncertainty surrounding the economic impact of these policies and indicated that the Federal Reserve would adopt a patient approach before making any changes to interest rates. He acknowledged that while the inflationary effects might be temporary, they could also be more persistent, complicating the Fed's dual mandate of maintaining price stability and maximum employment. The stock market reacted negatively to Powell's remarks, with significant declines in major indices. Investors are now grappling with increased volatility and the potential challenges posed by the new tariff policies.
