Trump's Tariffs Are Hurting America? Fed Chair Jerome Powell Warns Of Rise In Inflation Due To Tariffs

Fed Chair Jerome Powell said Trump's tariffs are the main factor behind inflation exceeding the central bank's 2% goal, describing them as a one-time price increase

After the US inflation crossed the 2% mark, UD Fed Chair Jerome Powell led Federal Open Market Committee (FOMC) slashed the key benchmark interest rates by 25 basis points on Wednesday, December 10.

Powell, who has been at crossroads with Trump on several occasions, said the main factor behind the rise in inflation are the byproduct of Trump tariffs.

Also Read: India's CAD Manageable At 1% GDP Amidst Tariff Export Slump: Report

"It's really tariffs that are causing the most of the inflation overshoot," Powell said after the latest Fed meeting, reiterating his expectation the tariff impact on inflation is likely to be a "one-time price increase.

The US Fed Reserve has brought down the interest rate range to 3.50% to 3.75%, signalling a 25 basis point rate cut amidst increasing inflation level in the US and a weak job market.

This marks the third rate cut this year led by Fed Chair Jerome Powell, beginning from September 2025. This comes during a period marked by varying trends in the US economy. Meanwhile, the central bank is prioritising on balancing the dual mandate of stabilising prices while catering to the country's labour market.

US Fed's October FOMC Meet Outcome 

In the previous FOMC meet, the US Fed Reserve agreed to reduce key interest rates for the economy by 25 basis points between 3.75% to 4.00%, making it the second consecutive interest rate slashed in the calendar year. This key decision as made when the US Federal government was facing a shutdown. 
 The US Fed Chair had maintained a similar stance and credited the increase in price as a result of high tariffs imposed by the US President Donald Trump