Fed Chair Powell says he expects Trump's tariffs will hike inflation

The remarks came as U.S. stocks plummeted over an escalating trade war.

Federal Reserve Chair Jerome Powell said Friday he expects President Donald Trump's tariff policy will hike prices and slow economic growth, while noting that key indicators "still show a solid economy."

Policy changes implemented by the White House have contributed to a "highly uncertain outlook," Powell said, making the remarks as stocks plummeted amid an escalating global trade war.

Despite the murky outlook, Powell said Trump's tariffs would likely increase consumer prices.

"While tariffs are highly likely to generate at least a temporary rise in inflation, it's also possible the effects will be more persistent," Powell told the audience at the Society for Advancing Business Editing and Writing conference in Washington, D.C.

Minutes before Powell was set to speak, Trump sharply criticized the Fed chair, calling on him to reduce interest rates.

"This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates," Trump said in a post on Truth Social.

Trump also claimed without evidence that political considerations have played a role in Powell's decision-making on interest-rate policy.

On Friday, Powell declined to directly respond to Trump. Still, Powell strongly rebuked any concern about his political independence.

"I don't respond to political remarks," Powell said, adding that it would be inappropriate for the central bank to comment on U.S. trade policy.

"We try to stay as far as we can from the political process," Powell said. "That's what people expect from us."

This is a developing story. Please check back for updates.