As US stocks continue to plummet, the Fed chair says Trump's tariffs could make inflation worse.
The US Federal Reserve chair, Jerome Powell, warned Donald Trump’s tariffs were generating a “challenging scenario” for the central bank and were likely to worsen inflation. Powell’s comments on Wednesday came US stock markets had already been rattled by a new trade restriction on the chip designer Nvidia. The sell-off picked up as Powell spoke to The Economic Club of Chicago. The S&P 500 index dropped by about 2% in afternoon trading, with the tech-heavy Nasdaq index down 3%. The Dow Jones fell 1.4%. “The new administration is in the process of implementing substantial policy changes in four distinct areas: trade, immigration, fiscal policy and regulation. Those policies are still evolving, and their effects on the economy remain highly uncertain,” said Powell. Powell said the US economy was well-positioned but added that Trump’s tariffs were likely to cause “at least a temporary rise in inflation. The inflationary effects could also be more persistent.” Nvidia, the Californi...