Federal Reserve Chair Jerome Powell issued a warning about the inflationary impact of tariffs during a recent address to the Economic Club of Chicago. He highlighted that sustained tariff increases could dampen U.S. economic growth. This concern comes amidst the Federal Reserve’s dual mandate—managing inflation and fostering sustainable economic activity—as it navigates the potential challenges brought by increased trade barriers.
Powell emphasized the potential for tariffs to contribute to a rise in inflation, slow down economic expansion, and even increase unemployment rates if sustained increases continue. This concern has implications for both traditional financial markets and the crypto sector as investors may shift their strategies based on the Fed’s response.