Federal Reserve Chair Jerome Powell acknowledged on Wednesday that President Donald Trump’s initial policies, including sweeping import tariffs, have likely steered the US economy toward slower growth and temporarily higher inflation. Speaking after the Fed held its benchmark interest rate steady at 4.25%-4.50%, Powell highlighted the “unusually elevated” uncertainty surrounding the economic outlook, with prices now expected to rise faster than previously anticipated, partly due to Trump’s tariff plans.Despite the inflationary pressures, Fed policymakers maintained their forecast for two quarter-point rate cuts by year-end, attributing the decision to weakened growth and the “inertia” of navigating a murky economic landscape. Powell’s remarks underscored the challenges facing the central bank as it balances conflicting signals from trade policies, inflation, and growth.
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