Powell Cautions on Economic Slowdown Amid Rising Tariff Concerns

U.S. Federal Reserve Chair Jerome Powell hinted at a potential economic slowdown due to tariffs, affecting consumer spending and inflation. Despite market unease, the Fed plans to keep interest rates steady for now. His comments highlight ongoing concerns over inflation and slowing growth, with impacts on stock and bond markets.

U.S. Federal Reserve Chair Jerome Powell warned of a potential economic slowdown, attributing it partly to tariffs impacting consumer spending and inflation rates. The statement, delivered at the Economic Club of Chicago, suggested the Fed's current stance would remain unchanged as they await further clarity before any policy adjustments.

Market reactions were swift; the S&P 500 saw a decline, U.S. Treasury yields fell, and the dollar index dropped. Economists like Rick Meckler challenge the administration's portrayal of tariffs as transitory, while Powell's commentary suggests a longer-lasting impact on inflation and growth.

Powell confirmed investor concerns over slowing growth and persistent inflation. Analysts fear the Fed may struggle to balance inflation control with growth stimulation, given its dual mandate. The situation leaves markets in uncertainty, wary of potential volatility until fiscal clarity is achieved.

(With inputs from agencies.)