Federal Reserve Chair Jerome Powell warned on Wednesday that the inflationary impact of United States President Donald Trump's tariffs could be "more persistent" than anticipated.
"Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored," Powell said before the Economic Club of Chicago. "For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance. We continue to analyze the incoming data, the evolving outlook, and the balance of risks."
"We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension. If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close," he added.
