Tariffs Tempest: U.S. Economy Braces for Impact

U.S. economic growth is slowing, influenced by consumer spending and import tariffs. Federal Reserve Chair Jerome Powell highlights uncertainties in trade policies, with potential inflationary effects. The Fed currently maintains a steady interest rate, while monitoring inflation and employment indicators for future policy adjustments.

The United States is witnessing a slowdown in economic growth, with consumer spending rising modestly and a surge in import activity potentially impacting GDP estimates. Federal Reserve Chair Jerome Powell highlighted these developments in a speech at the Economic Club of Chicago on Wednesday.

Powell noted that despite the uncertainties and downside risks, the U.S. economy remains robust. However, data reveals that growth has decelerated since last year. External analysts predict further deceleration, exacerbated by trade policy concerns altering business and consumer sentiment.

Addressing the tariffs imposed by President Donald Trump, Powell acknowledged their evolving impact, which could be larger than expected. The Fed is keeping the benchmark interest rate stable to gain clarity before making policy changes. Powell underscored the importance of managing inflation and maintaining maximum employment as the central bank's priorities.

(With inputs from agencies.)