Powell says the definitions will cause high inflation, and it can be fixed

Federal Reserve Chairman Jerome Powell He said at a conference on Friday that President Donald Trump’s tariff is likely to increase inflation and slow economic growth, saying that the central bank will do its best to maintain a long -term low inflation.

President Trump The overwhelming tariff plans were unveiled on Wednesday, which prompted sales in the stock market, which prompted revenge on American merchant partners. S&P 500 fell about 4 % on Friday and more than 6 % over the past five days, while Dow Jones Industrial Malce has entered a correction area, a decrease of more than 10 % of the record in December.

Powell said in his statements at Friday’s conference that it is difficult to predict the impact of definitions on inflation and other economic indicators, “so that there is greater certainty about the details, such as the tariffs will be targeted, the extent of any period, and the extent of any revenge on our commercial partners.”

“Although uncertainty is still high, it has now become clear that the customs tariff increases will be much greater than expected, and it is likely that the same applies to economic effects, which will include higher inflation and slower growth.” “The size and duration of these effects are still not certain.”

China is running out of 34 % of customs duties on US imports

Powell is sad that although “the definitions are likely to be born at least temporarily The rise in inflationIt is also possible that the effects are more stable. ”

“Avoiding this result will depend on maintaining the long -term inflation expectations with good accompanied by the size of the effects and the time it takes to fully pass the prices,” he said. “Our commitment is to maintain long -term inflation expectations, and make sure that one time increase in the price level does not become a problem with continuous inflation.”

The inflation remained stubborn than the FBI targeting rate of 2 %, with the latest consumer price index data (CPI) by 2.8 % for February and the preferred scale of the Central Bank, Personal consumption expenses (PCE) Index, at 2.5 %.

Trump calls for reducing interest rates at the Federal Reserve and “stop playing policy”

Powell was asked during a session of questions and answers that followed his speech at the annual liberation and writing association in Virginia about Federal reserve role At the time of turmoil in financial markets and economic uncertainty resulting from political policies.

“We are driven by analysis, thinking, discussion, accurate discussion, and the advantages of things. We are trying to stay as much as I can from the political process, and do not look at political courses or such things.”

What is the time frame of Trump’s definitions to increase prices?

“We do not want to be part of the broader discussion about the wisdom of policies that have not been appointed to us. We are not responsible for Commercial policyHe said: “, We will not attach, immigration policy, and financial policy, and we do not attach, and these decisions make these decisions, and what we do is to use our tools to try to achieve the goals that we have cost Congress, which is the utmost employment and stability of prices.”

“I would like to think that over time, we are a source of calm and rational analysis and also stability,” he added. “The work we provide Financial stability and macroeconomics For the public, this is our goal. “

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The upcoming policy meeting in the Federal Reserve is in May, and Powell said that with regard to interest rates on the central bank, “it seems that we do not need to be in a hurry.”