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The Trump administration’s expansive new tariffs will likely lead to higher inflation and slower growth, and the Federal Reserve will focus on keeping price increases temporary, Fed Chair Jerome Powell said Friday. The Fed chair’s remarks come two days after Trump unveiled sweeping tariffs that have upended the global economy and sent stock prices in the U.S. and overseas plunging, with investors nervously watching as key trading partners retaliate. China on Friday said it would impose a 34% tariff on imports of all U.S. products starting April 10, the day after Mr. Trump’s new tariffs go into effect.In written remarks delivered in Arlington, Virginia, Powell said that the tariffs and their impacts on the economy and inflation are “significantly larger than expected.” He also said that the import taxes are “highly likely” to lead to “at least a temporary rise in inflation,” but added that “it is also possible that the effects could be more persistent.” “Looking ahead, higher tariffs will be working their way through our economy and are likely to raise inflation in coming quarters,” Powell said. “Our obligation is to … make certain that a one-time increase in the price level does not become an ongoing inflation problem,” he added.Powell’s focus on inflation suggests that the Fed will likely keep its benchmark int …
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