Powell worries that trade is slowing down the Fed's progress

Federal Reserve and the Impact of Tariffs

On May 8, Federal Reserve Chairman Powell expressed concerns about the impact of the tariffs imposed by President Trump on April 2. According to him, the current tariff levels "far exceed expectations" and could lead to a decline in economic growth. This could result in higher long-term inflation.

If these high tax rates continue to be implemented, inflation and unemployment rates may increase, while economic growth may slow down. Although the impact on inflation may only be temporary, it also has the potential to be prolonged. Mr. Powell noted that the risks of rising inflation and unemployment will definitely increase if tariffs remain at their current levels.

He also noted that, given the scope and scale of the tariffs, the Federal Reserve's ability to achieve its inflation and unemployment targets may be delayed until next year. This creates significant challenges in balancing important macroeconomic factors, especially when considering the impact of policy on cryptocurrency.

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