Federal Reserve Chair Jerome Powell addressed a conference for the Society for Advancing Business Editing and Writing, cautioning that President Donald Trump's tariffs could lead to higher inflation.
"Higher tariffs will be working their way through our economy and are likely to raise inflation in coming quarters. We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation," Powell stated. He mentioned inflation over 36 times during his speech, indicating that the Federal Reserve does not plan to lower interest rates, which are currently around 4.3%. Traditionally, higher borrowing costs can slow economic growth and reduce inflation.
Meanwhile, Trump urged Powell via Truth Social to cut interest rates. Despite being appointed by Trump, Powell has no plans to resign, and the president cannot legally remove him. Powell's term ends in 2026, but reports suggest Trump's team is secretly planning to undermine the Fed's independence.
— new from Daily Kos