US Federal Reserve Chairman Jerome Powell has raised concerns about Donald Trump’s tariff policy. He said it could increase inflation and slow down the country’s economic growth. Speaking at an event at the Economic Club of Chicago on Wednesday, Powell said the Fed’s main focus is to make sure that the inflation caused by Trump’s policy stays limited and does not last for too long.
Powell Calls Trump’s Tariffs Higher Than Expected
Powell gave a strong warning about the continuous rise in tariffs under Trump’s plans. He said, “The level of tariffs announced so far is much higher than expected. This could lead to higher inflation, slower economic growth, and increase unemployment.”
He added that this is a serious challenge, one the Federal Reserve has not faced in the past 50 years.
Citizens May Bear the Burden of Higher Costs
Powell explained that rising prices would put pressure on the labor market. Other Fed policymakers have also supported keeping interest rates steady for now, to closely watch how Trump’s tariff policy affects the economy.
They fear that as the economy slows down, unemployment could rise and inflation may increase — and in the end, common people will have to bear the burden through higher prices on everyday goods.
Impact of Powell’s Statement on Stock Market
After Powell’s remarks, the US stock market fell yesterday:
- S&P 500 Index closed down 0.17% at 5,396.63
- Nasdaq slipped 0.05% to 16,823.17
- Dow Jones fell 0.38% to 40,368.96
The Philadelphia Semiconductor Index also dropped by around 7%. Shares of Nvidia fell by 10%, and other technology stocks lost more than 5% in value.
In short, Powell’s warning about Trump’s tariff plan created tension in the markets and raised fears about inflation and job losses in the coming months.
