The economic impact of the new tariffs announced by the United States (US) will probably be much greater than initially expected. The warning was made this Friday by the chairman of the US Federal Reserve (Fed), Jerome Powell, during a speech at the annual conference of the Society for Advancing Business Editing and Writing (SABEW), in Arlington.

Powell said the U.S. central bank must ensure that the tariffs do not lead to a rising inflation problem, but stressed:"Our role is not to comment on the policies" of the U.S. administration."While uncertainty remains high, it is now becoming clear that the increase in tariffs will be significantly larger than expected," the Fed chairman said."So are the economic effects, which will include higher inflation and slower growth."

"While it is very likely that tariffs will generate at least a temporary increase in inflation, it is also possible that the effects could be more persistent," Powell said, sounding a more cautious tone than he had on March 19 after the Federal Reserve's last policy meeting, when he said he expected the effect of the tariffs to be transitory. At the time, the US central bank kept its key interest rate unchanged in a range of 4.25% to 4.5%.

Following US President Donald Trump's announcement that tariffs would rise to their highest level in a century, money markets have begun to factor in a 50% chance that the Fed will make four rate cuts of 25 basis points each this year, a scenario that was not even considered the day before. Bets have also increased on monetary easing by the European Central Bank (ECB) and the Bank of England. However, the head of the US monetary authority has assured that there is still time.

"Our obligation is to keep longer-term inflation expectations well anchored and to ensure that a one-off increase in the price level does not turn into a permanent inflation problem," Powell said."We are well positioned to await greater clarity before considering any adjustments to our policy stance."

Minutes before Powell began speaking, Trump decided to use his social network, Truth Social, to address the Fed chairman:" This would be a perfect time for the Fed chairman to cut rates,", he wrote in a post."He is always 'late', but he can now change his image and fast. Energy prices are down, interest rates are down, inflation is down, even the price of eggs is down 69% and employment is up, all in two months - a huge victory for America. Cut interest rates Jerome and stop playing political games," the Republican's post reads.