Speaking at the Economic Club of Chicago in Illinois, Chair Jerome Powell addressed the Federal Reserve’s increasing concerns about the economy.
Powell began his address positively, stating, “At the Fed, we are always focused on the dual-mandate goals given to us by Congress: maximum employment and stable prices. Despite heightened uncertainty and downside risks, the U.S. economy is still in a solid position. The labor market is at or near maximum employment. Inflation has come down a great deal but is running a bit above our 2 percent objective.”
However, the Chair added that the uncertainty surrounding tariffs could result in lasting damage to the U.S. economy, as “the level of the tariff increases announced so far is significantly larger than anticipated.”
Despite its strengths, Powell admitted that the economy could be jeopardized by Trump’s trade war: “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension.”
“For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance. We continue to analyze the incoming data, the evolving outlook, and the balance of risks. We understand that elevated levels of unemployment or inflation can be damaging and painful for communities, families, and businesses. We will continue to do everything we can to achieve our maximum-employment and price-stability goals,” he concluded.
Following Powell’s comments, the Dow was down 700 points, or 1.7%. The S&P 500 fell 2.5%, and the Nasdaq slid 3.5%.
By CEO NA Editorial Staff
