Fed Chair Warns Trump Tariffs Will Lead to ‘Higher Inflation’ And Slow Economic Growth

Federal Reserve Chair Jerome Powell said on Friday that he believes President Donald Trump’s sweeping global tariffs and resulting trade wars risk “both higher unemployment and higher inflation.

Speaking at an event just outside Washington, DC, Powell told the crowd, “While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”

CNN’s Vanessa Yurkevich reported on Powell’s remarks during Inside Politics on Friday midday. Anchor Dana Bash began the segment by playing a quick clip of Powell, saying:

Looking ahead, higher tariffs will be working their way through our economy and are likely to raise inflation in coming quarters. While uncertainty remains elevated, it is now becoming clear that tariff increases will be significantly larger than expected. And the same is likely to be true of the economic effects, which will include higher inflation and slower growth. The size and duration of these effects remains uncertain.

Yurkevich reported, “Now, reporters in the room also asked Jerome Powell whether he believes that the economy is headed for a recession. He would not answer that. But we know JP Morgan revised their recession outlook up from 40 percent before President Trump announced these tariffs on April 2nd to 60 percent.”

“And you can see just what the stock market has done over time since President Trump took office in January. Just a steep decline at the Nasdaq, the S&P, and on the Dow. Just a precipitous decline, especially in this last week, as investors are craving some sort of uncertainty [sic]. Dana, does it look like they’re getting that right now,” she concluded.

Notably, Powell, who was appointed by Trump in his first term, told reporters in November that he would not step down if Trump asked him to or tried to fire him.

Watch the clip above via CNN.