Fed Chair Powell sounds alarm on tariffs, sending stocks lower

Federal Reserve Chair Jerome Powell said Wednesday that he expects President Donald Trump’s tariffs policy to cause higher inflation and slower economic growth, complicating potential central bank efforts to ease the fallout.

“The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell told the audience at the Economic Club of Chicago.

Powell’s remarks immediately sent stocks lower as investors digested the top central banker’s concern about the tariffs.

Wednesday’s address marked Powell’s first public remarks since Trump last week paused his so-called “reciprocal tariffs” on most countries for 90 days.

“Markets are struggling with a lot of uncertainty and that means volatility,” Powell said on Wednesday. Still, he added, the volatility reflected the significance of the policy changes, rather than abnormal behavior in the markets.

Source-ABC