The President of the Federal Bank (Fed) US Jerome Powell said the financial impact of young people dictatorial It is likely to be significantly higher than expected and that the central bank should ensure that this does not lead to increasing inflation problem, thereby limiting expectations to reduce interest rates.
“While uncertainty remains increased, it is now clear that duty increases will be significantly higher than expected,” the Fed president told Friday (04.04.2025) at the Annual Conference of Society for Advancing Business Editing and Writing, according to Bloomberg. “The same is likely to apply to the economic impacts, which will include higher inflation and slower growth.”
His observations follow the announcement of President Donald Trump on the imposition of new sweeping duties on imports from around the world, which has already begun to provoke reactions from foreign governments.
Powell’s tone was more cautious than the March 19 press conference when he said the inflationary impact of duties was expected to be transient.
“While duties are very likely to cause at least one temporary increase in inflation, it is also possible that the impact is more persistent,” Powell said on Friday.
He then emphasized that the Fed’s action would focus on preventing any increase in public perception that inflation escapes Fed control.
“Our obligation is to maintain long -term expectations for inflation well -established and to ensure that a lump sum increase in prices will not turn into a constant inflation problem,” he said. “We are able to expect more clarity before considering any adjustments to our policy.”
The Fed president and his colleagues face a narrower path to land the economy back to full -time low inflation. The duties announced by the Trump government on Wednesday are provoking both sides of the Fed’s command to maintain fixed prices and maximum employment.
Fed officials will meet in Washington next time on May 6-7.
Shortly before Powell’s speech, Trump told Truth Social that it is a “perfect” moment for Powell to reduce interest rates. “It’s always ‘delayed’,” Trump wrote. “Reduce interest rates, jerom, and stop politicians”!
Powell spoke after the announcement of the March employment report, which showed that non -agricultural payrolls increased by 228,000 last month. The unemployment rate increased to 4.2%. Some analysts discount the importance of the report in the light of duties.