Powell blames Trump tariffs for inflation spike
Fed Chair Jerome Powell has repeatedly blamed tariffs for driving up inflation, stating that price increases largely reflect higher tariffs rather than broader economic pressures, and describing the U.S. economy as facing tariff-driven goods inflation. Powell warned that private sector job growth under Trump is essentially zero, while inflation pressures are rising due to tariffs.
Key Points
- Incoming data and surveys suggest that price increases largely reflect higher tariffs rather than broader price pressures.
- Tariff increases will likely take time to work through supply chains, with one-time price increases spread over several quarters.
- Powell stated that all inflation forecasts for the United States went up materially as a consequence of tariffs.
- The Fed's top goal is keeping price increases from tariffs limited to a one-time event so inflation doesn't linger.
- Powell characterized the problem as a one-time price increase pushing up goods categories as import levies work through supply chains, with goods inflation expected to peak around Q1 2026.