- Fed Chair Jerome Powell said the current size and scale of tariffs, if left unchanged, would likely cause both unemployment and inflation to rise. The U.S. suffered a ruinous bout of "stagflation” in the 1970s, which required a painful recession to cure runaway price growth.
The Federal Reserve may have decided to keep interest rates steady, but it also sounded a warning that President Donald Trump’s tariffs might force it to choose between lowering either inflation or the unemployment rate.
