CNBC | Wednesday, April 16, 2025 
Powell indicates tariffs could pose a challenge for the Fed between controlling inflation and boosting growth

Federal Reserve Chair Jerome Powell expressed concern in a speech Wednesday that the central bank could find itself in a dilemma between controlling inflation and supporting economic growth. With uncertainty elevated over what impact President Donald Trump’s tariffs will have, the central bank leader said that while he expects higher inflation and lower growth, it’s unclear where the Fed will need to devote greater focus. “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said in prepared remarks before the Economic Club of Chicago. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.” The Fed is tasked with ensuring stable prices and full employment, and economists including those at the Fed see threats to both from the levies. Tariffs essentially act as a tax on imports, though their direct link to inflation historically has been spotty. In a question-and-answer session after his speech, Powell said tariffs are “likely to move us further away from our goals … probably for the balance of this year.” Powell gave no indication on where he sees interest rates headed, but noted that, “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.” Stocks hit session lows as Powell spoke while Treasury yields turned lower…Read more