- Inflation can increase and growth can slowly As a result of President Donald Trump's tax policies, according to federal reserve chairman Jerome Powell. During a speech on Wednesday, Powell said the main goal of the Fed was to set a price increase from the minor Trump tariff for a one -time event, so inflation did not grow.
Federal Conservation Chairman Jerome Powell heard his strong warning to this day on the impact of President Donald Trump's tariffs, remote tariffs.
“The rate of tax increase announced so far is higher than expected, and the same could be true for economic impacts, which will include inflation and slow growth,” Powell said on Wednesday during a speech at the Chicago economy.
Taxes would increase its influences and slow growth, Powell said, emphasizing the action he made earlier this month. They are also very heavy on business expectations and consumers had on the economy.
“Household and business investigations report a decrease in emotions and high levels on that attitude, significantly expressing concern for business policy,” Powelll said.
The economy was now faced with “low dangers,” Powell added – a strong acknowledgment of the economic decline in the common role of the federal conservation chairman.
In time since Powell The latest comments Earlier this month, the White House was reinstated and then released several parts of its natural tax policy. In particular, Trump He rested Taxes announced April 2 per country except Chinawhich was struck by additional tariffs. His rule then allowed exemptions For certain products like smartphones and semiconductors, up to Trump privately intervened Back course On top of those exemptions. Returning and repeated return created a backdrop for business and investors, many of whom were still leaving the trump tax market.
Powell felt like the “most likely tariff” would increase the price, but the important question that the Fed was still inspecting how long they would last.
“Our role is to set the expectations of long -term influences to have anchors and to ensure that increased price rate is not a problem with the ongoing inflammation,” he said.
One of the most important metrics that fed clocks in its economic evaluation is the expectation of long -term influences. If those are increasing, it means business leaders, investors, and the general public see inflation as a chronic problem that will not go away. When that happens, they are more likely to reduce spending, which only increases the risk of economic growth.
The latest CPI report from March measured inflation by 2.4%, less than expected. However, the reading came before Trump implemented his tax policy.
Since Powell spoke last time, Trump's economic chaos came from the stock market to Guarantee market. The crops over the 10 and 30 years of the year increased at the same time as America and international shares were criticizing. That gave a signal that the feared investors were making their money on stock, and instead of putting it on American bonds, they focused on the safest investment in the world, in fact they were selling Those properties too. That power showed a lack of faith that has never been made in the American economy.
“There is no modern experience of how to think about this,” Powell said about the recently implemented tax policy.
The steps in the securities market were common, according to Powell, who encouraged attention on jumping to the conclusions about what caused it.
“It is marketing to process the historical development and with great uncertainty, “Powell said.” I think maybe you will see the difficulty going on, but I didn't try to be obvious about what was causing it. “
As usual, Powell did not put his hand on the upcoming financial policy steps or when it would happen. Instead, Powell said that the power of the American economy had bought during the Fed before it needed to make a decision.
“At this time, we are good to wait for more transparency before we consider any correction of our policy position,” he said.
Trump's tariffs are about to increase the price of business with consumers, which can hinder fed years efforts to bring inflation. In that case, the increase in rate can be confirmed. However, that will be a change from a cycle to reduce the rate that the Fed has been since September. At the same time, the reduction of the rate can be confirmed if the American economy is entering the economy. The worst case is stagnation, which is when inflation is high but the economy does not grow. Powell described the situation as a “challenge” in which two Fed goals for full employment and consistent price would be “for tension.”
“It's a difficult place for the central bank to be inside,” Powell said.
In short, the result of the result of what the fed can, or it should do, only increases.
The market is currently priced between two to three cuts in 2025 from the second half of the year. But such plans can be subject to change due to the fragile factors in the whole economy.
“Marketing is fighting a lot of uncertainty, and that means fragile,” Powell said.
This story was previously shown Bahati.com
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