US Fed Chair Powell warns Trump tariffs will hit US economy, raise prices | World News
The economic growth of the United States is bound to take a plunge and prices of products will rise for consumers due to the reciprocal tariffs imposed on goods entering the country, Federal Reserve Chair Jerome Powell said on Wednesday.
The import taxes recently announced US President Donald Trump are larger than the Federal Reserve had expected, and the tariff rates have actually gone beyond the higher end of its estimates, Chair Powell said, BBC reported.
The comments Powell come amid turmoil in the global financial markets due to uncertainties over trade tariffs coming into force and escalating trade war between US and China.
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Surveys of households and businesses reported a “sharp decline” in their sentiment over the financial health of the US economy majorly due to tariffs, Powell added.
“These are very fundamental policy changes. There isn’t a modern experience of how to think about this,” Powell said at an event hosted the Economic Club of Chicago, CNN reported.
Powell further explained “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” BBC reported.
The US president had said that reciprocal tariffs would boost the manufacturing in the country and create jobs, however, the stock market has seen bloodbath until now with trillions of dollars of investor wealth getting wiped out.Story continues below this ad
As Powell spoke about the uncertainties caused due to the policy changes to trade as well as immigration, fiscal policy and regulation on the US economy, the US markets tumbled with Dow falling 700 points or 1.7%, S&P 500 fell 2.5% while Nasdaq Composite plunged 3.5%.
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