A top economic official is now warning that one of President Donald Trump’s key policies could trigger higher inflation in the future — or even a recession.
The Daily Beast reported Wednesday that Federal Reserve Chairman Jerome Powell (who Trump appointed in 2017 during his first term) appeared to take a jab at the administration when giving his own assessment of the U.S. economy. Powell suggested that inflation could be “somewhat elevated,” and blamed higher unemployment numbers and price instability on the “turmoil” surrounding the Trump administration.
“A good part of it is coming from tariffs,” Powell said of his inflation projections.
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Powell made the remarks to journalists at the end of a two-day Federal Open Market Committee meeting. The Fed announced Wednesday that interest rates would remain steady for now, as the nation’s central bank has “high uncertainty” about “tariff inflation.” Powell’s wait-and-see approach comes as Trump is set to impose new tariffs in April that may impact consumer spending and job growth. Powell emphasized that while the economy was mostly healthy, Americans were in a pessimistic mood — which he attributed to chaos in the White House.
“We understand that that sentiment is quite negative at this time,” he said. “And that probably has to do with, you know, turmoil at the beginning of an administration. It’s making, you know, big policy changes in areas of policy, and that’s probably part of it.”
One of the more eyebrow-raising moments of Powell’s press conference came when he acknowledged that there was indeed a possibility of the economy experience a contraction at some point in 2025. He stressed that the chances of a recession were “not high” but still “elevated” due to the current economic climate.
“There is always an unconditional possibility of recession,” Powell said. “It might be broadly in the range of 1 and 4 at any time if you look back through the years. The question is whether this current situation—those possibilities are elevated.”
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Click here to read the Beast’s article in full (subscription required).
