Jerome Powell is concerned about Donald Trump's tariffs.

Donald Trump recently caused an economic shock by announcing new tariffs. In response, Jerome Powell, chairman of the Federal Reserve (FED), warned that these measures could worsen inflation while slowing growth. What will the impact on interest rates be? Find out here. Jerome Powell is concerned about Trump's tariffs On April 2, 2025, Donald Trump's announcement of a series of new tariffs caused the financial markets to immediately decline. This decision, although anticipated by some, was seen as a shock to many investors and economists who feared that trade tensions would worsen. In response to this initiative, the Chairman of the FED, Jerome Powell, expressed significant concern. In a recent statement, Powell noted that the tariffs imposed by Donald Trump are significantly higher than expected and pose a risk of fueling inflation while slowing economic growth: The planned tax increase may have inflationary effects in the coming quarters. Although there is still uncertainty, it is clear that the increase in tariffs is significantly more than expected, likely leading to higher inflation and slower growth. The effects may last longer than anticipated. How does it affect interest rates? The central question now is about the direction of the FED's interest rates in response to this situation. So far, the Federal Reserve has chosen a relatively low interest rate to stimulate the economy, but recent decisions by Trump may force Jerome Powell and his colleagues to reconsider this strategy. If Trump's tariffs actually lead to inflationary pressure, this could prompt the FED to raise interest rates to curb rising prices. However, slowing economic growth may also prompt the FED to implement accommodative measures, such as cutting interest rates, to support economic activity. Therefore, it is very difficult to predict whether Powell will choose to raise or lower interest rates in the coming months. However, the balance between inflation and growth will be very important in this decision. This reaction from Jerome Powell came 24 hours after France and Europe decided to retaliate against Trump's tariffs! It highlights the challenges that Europe and the US economy may face in the coming months. Investors and analysts will need to closely monitor upcoming developments to anticipate adjustments to US monetary policy.