On April 16, 2025, Federal Reserve Chair Jerome Powell addressed the Economic Club of Chicago, expressing concerns over the potential economic repercussions of former President Donald Trump’s proposed tariffs. Powell highlighted that these tariffs could elevate consumer prices, leading to increased inflation, and potentially result in job losses due to a slowing economy.
He emphasized that the tariffs might challenge the Fed’s dual mandate of maintaining maximum employment and stable inflation. The uncertainty surrounding trade policies has already affected household and business sentiments, contributing to a slowdown in economic growth.
Despite these challenges, Powell noted that the U.S. economy remains fundamentally strong. However, he signaled a cautious approach, indicating that the Federal Reserve would be patient in adjusting its policies until there is greater clarity on the evolving economic landscape.