WATCH LIVE: Federal Reserve chairman speaks on the economy – Washington Examiner
Federal Reserve Chairman Jerome Powell spoke on economic issues, notably addressing the implications of President Donald Trump’s upcoming tariffs, set at a 10% base rate on various countries. During his remarks, Powell acknowledged the uncertainty surrounding the tariffs’ potential impact on inflation, suggesting it would be “transitory.” However, he expressed concern that these tariffs might lead to stagflation, characterized by simultaneous weak economic growth and high inflation. This situation complicates the Federal Reserve’s ability to respond, as reducing interest rates, a common response to stimulate growth, could inadvertently worsen inflation. The conversation highlights the delicate balance policymakers must maintain amid changing economic conditions.
WATCH LIVE: Federal Reserve Chairman Jerome Powell speaks on the economy
Federal Reserve Chairman Jerome Powell addresses economic concerns a day before the implementation of President Donald Trump’s 10% base tariff rate on dozens of countries.
WHICH PRODUCTS WILL SEE HIGHER PRICES FROM TRUMP’S TARIFFS ON CANADA AND MEXICO?
On Wednesday, Powell acknowledged that there was much uncertainty surrounding the scale at which tariffs would affect inflation. However, he said that while Trump’s tariffs will lead to inflation, it will be more “transitory.”
Trump’s tariffs are expected to spark stagflation, which consists of weak growth and high inflation. The Fed’s usual remedy of cutting interest rates to address weak growth could exacerbate the inflation rate.
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