Recently, Federal Reserve Chairman Jerome Powell stated that the significant policy adjustments in tariffs and other areas under Trump have no precedent in modern history, which will put the Federal Reserve into unknown territory.

Powell bluntly said, "The current increase in tariffs has far exceeded expectations," and the uncertainty caused by tariffs will persist, potentially leading to sustained economic damage. The tariff policy has weakened economic growth momentum, increased unemployment rates, and accelerated inflation, with all three pressures appearing simultaneously, leaving the Federal Reserve facing a situation it has not dealt with in half a century. Additionally, the Federal Reserve may face a complex situation where the goals of its 'dual mandate' conflict with each other.

According to CNN, most economists believe that tariff policies will ultimately exacerbate inflation, lead to rising unemployment rates, and weaken economic growth, which is only a matter of time, especially after the large-scale 'retaliatory tariffs' postponed to take effect on April 9. Currently, these historically high tariffs have been delayed by the Trump administration until July.

Despite multiple claims by the U.S. government that other countries will pay the tariffs, Powell refuted this. He believes that based on the tariffs already imposed and the possibility of more tariff policies in the future, 'as economic growth slows, the unemployment rate may increase.'

Powell predicts that inflation is 'very likely' to worsen, which means that part of the burden caused by tariffs will be 'borne by the public'.

After Powell made these remarks, the U.S. stock market experienced a sharp decline: the Dow Jones Industrial Average fell 700 points, a decrease of 1.7%; the S&P 500 fell by 2.5%; and the tech-heavy Nasdaq Composite Index dropped by 3.5%.

David Russell, Global Market Strategist at TradeStation, commented: 'Powell is essentially issuing a 'last warning' to the Trump administration—this is both a clear warning about stagflation risks and an indication that the Federal Reserve will not underwrite the White House's policies through interest rate cuts.'

Chicago Fed President Austan Goolsbee recently stated that tariff policies have put the Federal Reserve in a difficult position. He believes that tariffs are like negative supply shocks. This is a stagflation shock that also worsens the Federal Reserve's 'dual mandate' goals. 'With rising prices, fewer job opportunities, and slowing economic growth, there is no universal script on how to respond to this situation.'

The latest report from the World Trade Organization (WTO) also points out that the global trade war will inflict trauma on the global economy, including the United States.

The WTO predicts that the global economic growth rate will slow due to tariff policies, with this slowdown being more evident in the North American region dominated by the United States, where the extent of the economic slowdown will be greater than in other regions.

The report pointed out that tariff policies and the retaliatory measures taken by various countries will lead to a 'sharp deterioration' in global trade prospects. The WTO predicts that global trade volume will shrink by 0.2%, while it is expected to grow by 2.7% without additional tariffs.

From the global economy down to people's wallets, trade in goods and services between countries is closely related. Economic contraction means fewer jobs or lower wages, putting financial pressure on the public, while governments and companies are also forced to make tough spending choices.

The WTO emphasized in its report that the uncertainty in global trade will exacerbate the global economy: when the uncertainty of future tariffs and trade relations increases, companies will delay or reduce investment. This, in turn, will decrease the flow of trade volume, ultimately causing economic growth to slow.

Fitch Ratings holds a similarly pessimistic view on the economic outlook, stating that 'in light of the escalating global trade war, it has significantly downgraded its expectations for global economic growth.'