Federal Reserve Chair Jerome Powell on June 24 told lawmakers on Capitol Hill that tariffs will likely raise inflation and weigh on the U.S. economy.
Powell will deliver his semi-annual monetary policy to Congress this week, emphasizing that economic activity is robust, employment conditions are solid, and inflation remains slightly above the institution’s 2 percent target.
Reiterating his comments from last week’s post-meeting press conference, Powell stated that policy changes will likely evolve, meaning their effects on the broader economy are uncertain.
While tariff effects will depend on their “ultimate level,” Powell cautioned that levies could revitalize price pressures.
“Expectations of that level, and thus of the related economic effects, reached a peak in April and have since declined,” Powell said. “Even so, increases in tariffs this year are likely to push up prices and weigh on economic activity.”…