Fed Chair Powell Warns of ‘High Uncertainty’ With Consumer Prices in Coming Months — Says Impact of Tariffs Now ‘Clearly Visible’

Federal Reserve Chair Jerome Powell warned there may be “high uncertainty” with the impact tariffs have on consumer prices in the near future.

Powell on Friday spoke at the Jackson Hole Economic Symposium in Jackson Hole, Wyoming. There, he parsed through various data points to offer insights on the country’s economic outlook.

When he spoke about inflation, he revealed that President Donald Trump’s sweeping tariffs have already resulted in slight price increases on goods. He also detailed how there would be more to come:

Turning to inflation, higher tariffs have begun to push up prices in some categories of goods. Estimates based on the latest available data indicate that total PCE prices rose 2.6% over the 12 months ending in July. Excluding the volatile food and energy categories, core PCE prices rose 2.9% above their level of a year ago. Within core, prices of goods increased 1.1% over the past 12 months — a notable shift from the modest decline seen over the course of 2024.

In contrast, housing services inflation remains on a downward trend; and non-housing services inflation is still running at a level a bit above what has been historically consistent with a 2% inflation.

The effects of tariffs on consumer prices are now clearly visible. We expect those effects to accumulate over coming months with high uncertainty about both timing and amounts. The question that matters for monetary policy is whether these price increases are likely to materially raise the risk of an ongoing inflation problem.

A reasonable base case is that the effects will be relatively short-lived, a one-time shift in the price level. Of course, “one-time” does not mean all at once. It will continue to take time for tariff increases to work their way through supply chains and distribution networks.

Powell has been a frequent target of Trump’s throughout much of the start of his second term. The president has repeatedly pushed for Powell’s Federal Reserve to lower interest rates to combat inflation, and has even floated the idea of firing Powell as a result of his refusal to do so.

Watch above via CNBC.