Powell won’t bow to Trump, sees uncertainty around high tariffs: ‘Inflation is going to be moving up and growth is going to be slowing’

U.S. Federal Reserve Chairman Jerome Powell said Friday President Donald Trump's 'Liberation Day' tariffs were higher than expected, will increase inflation and slow growth.

"Inflation is going to be moving up and growth is going to be slowing," Powell said Friday.

The Fed chair said businesses, investors and central bankers lack clarity because of the moving targets of the Trump tariffs' implementations, lengthy and impacts.

"While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth. The size and duration of these effects remain uncertain. While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent," Powell said.

The Fed chair said the U.S. central bank would be standing pat on interest rate cuts (or hikes) until they see Trump's tariffs and trade wars pan out.

"We are just waiting for clarity for what our policy path would be," Powell said.

Right before Powell's remarks, Trump pressed for an interest rate cut.

"This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always 'late,' but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months - A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!," Trump said in a Truth Social post Friday.

Powell stressed the Fed is "apolitical" Friday and said the central bank will digest the Trump tariffs' impact and longevity.

Trump's import taxes very by country but on average are higher than the 20% Smoot Hawley tariffs that worsened the Great Depression.

Trump argues the import taxes will bring spur manufacturing and investment in the U.S. His allies are also touting the revenue expected to be generated by the Trump's import taxes.

U.S. stocks were down sharply Thursday and Friday on worries about stagflation, trade wars and a potential recession.

On Friday, Dow Jones Industrial Average was down more than 1,600 points and the Nasdaq and S&P 500 were both down more than 4% in afternoon trading.

Powell, whose term ends next year, said markets, business and the Fed would all like to see some more economic clarity before taking action.

That includes interest rate cuts.

"There's a lot of waiting and seeing going on — including by us," Powell said.

Trump did indicate potential tariffs negotiations with Vietnam (which is receiving a 46% import tax levy under Trump's tariff regime).