Powell: ‘Premature’ to adjust monetary policy on tariffs

On 4 April, Federal Reserve Chairman Jerome Powell spoke and said that uncertainty over the new tariff policy will decline at some point and should be much lower a year from now, Caixin reported. Now is a good time to step back and let the situation sink in. The Fed is in a good position to respond to any eventuality. Fed policy may be moderately restrictive. The Fed is waiting for conditions for policy clarity.

This comes after President Donald Trump urged that now is the perfect time to cut interest rates. In response, Powell said U.S. tariffs could lead to higher inflation, slower economic growth, and a higher risk of U.S. unemployment. On the issue of tariffs, adjusting monetary policy is ‘premature’.