Federal Reserve Chair Jerome Powell (Photo: Reuters)

Powell also said the import taxes will probably lead to at least a temporary rise in inflation, but added that it is also possible that the effects could be more persistent.

The Fed Chairman’s statement was made amid significant impacts on the stock market due to the tariff measures imposed by President Trump. The Fed Chairman and several other officials had repeatedly warned that high import tariffs would create difficulties for the central bank in reducing interest rates, which had been raised to combat inflation. 

Trump then criticized Powell on social media platform TruthSocial, accusing him of playing political games with the economy.

Trump said during the first two months of his administration, energy prices, interest rates, and inflation all decreased, while employment increased, and now is the ideal time to reduce interest rates.