President Donald Trump’s significant policy changes, including on tariffs, are unlike anything seen in modern history, putting the Federal Reserve in uncharted waters, Chair Jerome Powell said Wednesday.
“These are very fundamental policy changes,” Powell said at an event hosted by the Economic Club of Chicago. “There isn’t a modern experience for how to think about this.”
Powell said “the level of the tariff increases announced so far is significantly larger than anticipated” and that the lingering uncertainty around tariffs could inflict lasting economic damage. With Trump’s tariffs putting the economy on a path toward weaker growth, higher unemployment and faster inflation — all at the same time — the Fed is also facing a situation it hasn’t dealt with in about half a century.
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said.
US stocks tumbled as Powell spoke: The Dow was down 700 points, or 1.7%. The broader S&P 500 fell 2.5%. The tech-heavy Nasdaq Composite slid 3.5%.
The Fed is responsible for promoting full employment and keeping inflation in check, but Trump’s tariffs threaten both of those goals.
“These are very fundamental policy changes,” Powell said at an event hosted by the Economic Club of Chicago. “There isn’t a modern experience for how to think about this.”
Powell said “the level of the tariff increases announced so far is significantly larger than anticipated” and that the lingering uncertainty around tariffs could inflict lasting economic damage. With Trump’s tariffs putting the economy on a path toward weaker growth, higher unemployment and faster inflation — all at the same time — the Fed is also facing a situation it hasn’t dealt with in about half a century.
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said.
US stocks tumbled as Powell spoke: The Dow was down 700 points, or 1.7%. The broader S&P 500 fell 2.5%. The tech-heavy Nasdaq Composite slid 3.5%.
The Fed is responsible for promoting full employment and keeping inflation in check, but Trump’s tariffs threaten both of those goals.
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NewsTranscript
00:00President Donald Trump's significant policy changes, including on tariffs, are unlike anything seen in modern history.
00:07Putting the Federal Reserve in uncharted waters, Chair Jerome Powell said Wednesday.
00:12These are very fundamental policy changes, Powell said at an event hosted by the Economic Club of Chicago.
00:19There isn't a modern experience for how to think about this.
00:22Powell said the level of the tariff increases announced so far is significantly larger than anticipated
00:28and that the lingering uncertainty around tariffs could inflict lasting economic damage.
00:34With Trump's tariffs putting the economy on a path toward weaker growth, higher unemployment, and faster inflation,
00:40all at the same time, the Fed is also facing a situation it hasn't dealt with in about half a century.
00:46We may find ourselves in the challenging scenario in which our dual mandate goals are in tension, Powell said.
00:53U.S. stocks tumbled as Powell spoke.
00:55The Dow was down 700 points, or 1.
00:58The broader S&P 500 fell 2.
01:01The tech-heavy Nasdaq composite slid 3.
01:03The Fed is responsible for promoting full employment and keeping inflation in check,
01:08but Trump's tariffs threaten both of those goals.