The chair of the Federal Reserve warned Friday the administration who campaigned on egg prices being too high had ushered in policies that will only increase inflation.
Fed Chair Jerome Powell, appointed by President Donald Trump in his first term, said tariffs on Mexico, China, and Canada will raise prices for everyday Americans.
”Everybody is forecasting some inflation effect from tariffs," he told an economic forum in New York.
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Trump’s obsession with tariffs is well documented. He has flip-flopped on when he will implement a 25 percent tax on Mexican and Canadian imports, with his latest stance being Mexico gets a month-long delay while our northern neighbors do not.
China, meanwhile, has been slapped with two rounds of 10 percent tariffs with no end in sight for the extra tax being lifted.
”We’re at a stage where we’re still very uncertain about what will be tariffed, for how long, at what level," Powell said Friday, according to ABC News. “But the likelihood is some of that will find its way. It will hit the exporters, the importers, the retailers, and to some extent consumers.”
Those are strong words coming from the nation’s top central banker, who is tasked with keeping inflation as low as possible.
Powell said the U.S. economy is strong enough that the Fed does not need to act immediately to correct itself. Instead, he told the U.S. Monetary Policy Forum he will wait to see what the longterm result of tariffs and inflation looks like later in 2025.
“In some cases, where we think it’s a one-time thing, the textbook would be to look through it,” Powell said. “If it turns into a series of things and it’s more than that—if the increases are larger—that would matter.”
Trump has shown no signs of relenting on tariffs. He suggested Friday morning there should be new import taxes on Russia in retaliation to its ongoing bombing of Ukraine.
He added Friday afternoon—in an impromptu Oval Office news conference—that he was considering additional tariffs against Canada for lumber and dairy products, as Canada has specific tariffs against the U.S. for those industries.
“Canada has been ripping us off for years,” Trump said, adding, “that’s not going to happen anymore.”
Trump has conceded tariffs could cause “some disturbance” domestically, but he and his allies have claimed such action is necessary to obtain other policy goals—like slowing the flow of fentanyl—and to keep the U.S. from being taken advantage of.
Powell appears to be content with waiting out Trump’s tariff chaos. He says he will assess the damage—or potential wins—once things settle down a bit.
“The new administration is in the process of implementing significant policy changes,” Powell said Friday. “Uncertainty around these changes and their likely effects remains high. We are focused on parsing the signal from the noise as the situation evolves. We are not in a hurry.”
