US Federal Reserve Chair Jerome Powell said on Friday that recent tariff hikes announced by the Trump administration are expected to push inflation higher and slow economic growth. This will prompt the US central bank to adopt a wait-and-see approach on interest rate changes. Speaking at the Society for Advancing Business Editing and Writing conference, Powell said the economic outlook has become "highly uncertain" due to significant policy shifts underway, particularly in trade. "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," Powell said. He noted that inflation expectations for the near term have moved up, though long-term expectations remain anchored near the Fed's 2 per cent target. The US economy, he said, remains in a "good place" with stable unemployment and moderating job growth. The labour market, according to the latest data, saw a 4.2 per cent unemployment rate in March and steady job gains averaging 150,000 per month in the first quarter. However, Powell warned that the full economic effects of the tariffs—such as which goods are affected, the magnitude of the duties, their duration, and the scope of retaliation—remain unclear. "Uncertainty remains elevated," he added. The Fed, he said, is not ready to make immediate changes to its policy stance. "We are well positioned to wait for greater clarity before considering any adjustments... It is too soon to say what will be the appropriate path for monetary policy," Powell said. The US central bank has maintained a cautious tone in recent months amid growing geopolitical risks, including not only trade but also shifts in immigration, fiscal, and regulatory policy. Despite the concerns, Powell reaffirmed the Fed's commitment to its dual mandate. "We at the Fed will continue to do everything we can to achieve our maximum-employment and price-stability goals," he concluded. Attribution: Amwal Al Ghad English Download
