Powell says tariff shock drove the inflation overshoot
The Fed chair pointed to Trump-era import taxes as the main reason inflation is above target, calling it a one-time price jump rather than a lasting surge.
Federal Reserve Chair Jerome Powell told reporters the current overshoot of the Fed’s 2% inflation goal mostly reflects higher import prices from President Donald Trump’s tariff hikes, according to reporting from Reuters. He framed the tariff impact as a one-time price level jump, not a signal that inflation will keep climbing.
What he highlighted
- Tariffs remain the clearest driver of the recent inflation bump.
- The Fed still targets 2% inflation and will watch how quickly trade costs cool.
- Policymakers see the tariff effect as a temporary step-up in prices rather than a new inflation trend.
Powell added that officials will adjust policy as needed if trade costs fade slower than expected, but he avoided tying the outlook to any campaign promises. The overall message: inflation pressure is linked to tariffs, not to broader overheating.
Source: Reuters. Reporting by Michael S. Derby.
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