Fact Check: "Tariff inflation could threaten economic stability, says Powell"
What We Know
On June 24, 2025, Federal Reserve Chair Jerome Powell delivered a testimony before the Committee on Financial Services, where he discussed the potential impacts of tariffs on inflation and economic stability. Powell noted that while the economy remains solid, the imposition of tariffs could lead to increased prices and weigh on economic activity. He stated, "Even so, increases in tariffs this year are likely to push up prices and weigh on economic activity" (Semiannual Monetary Policy Report to the Congress).
In a press conference on June 18, 2025, Powell reiterated similar concerns, indicating that tariffs could result in a one-time price increase or lead to more persistent inflationary pressures (Transcript of Chair Powell's Press Conference June 18, 2025). He emphasized that the Federal Reserve must remain vigilant regarding inflation expectations and the overall economic outlook, which could be influenced by trade policy (Reuters).
Analysis
The claim that "tariff inflation could threaten economic stability" is supported by Powell's statements regarding the potential inflationary effects of tariffs. He highlighted the uncertainty surrounding the economic outlook, which is partly driven by trade policy concerns. Powell's remarks suggest that while the immediate effects of tariffs might be short-lived, there is a risk that they could lead to more sustained inflation if not managed properly (AP News, Bloomberg).
The sources cited are credible, as they come from official Federal Reserve communications and reputable news outlets. The Federal Reserve's reports and testimonies are primary sources that reflect the institution's official stance on economic matters. Additionally, news articles from established outlets like Reuters and Bloomberg provide context and analysis of Powell's statements, further validating the claim.
However, it is important to note that while Powell acknowledges the risks associated with tariffs, he also emphasizes that the current economic conditions are solid, with low unemployment and moderate wage growth. This duality indicates that while tariffs pose a risk, they are not the sole determinant of economic stability (Fidelity, Fox Business).
Conclusion
The claim that "tariff inflation could threaten economic stability, says Powell" is True. Powell's statements clearly articulate concerns about the inflationary impact of tariffs and their potential effects on economic stability. His emphasis on monitoring inflation expectations and the economic outlook underscores the seriousness with which the Federal Reserve views the issue.
Sources
- Semiannual Monetary Policy Report to the Congress
- Transcript of Chair Powell's Press Conference June 18, 2025
- Powell repeats rate cuts can wait as Fed studies tariff impacts
- Fed’s Powell repeats warning about tariffs as some GOP senators accuse
- google mail
- Powell says Fed needs to manage against risk tariff
- Powell Says Higher Inflation Outlook Keeping Fed on Hold
- Fed Chair Powell testifies US economy is in a 'solid position'
