The Federal Reserve warns that tariffs will trigger inflation in the US.

BarcelonaThe Federal Reserve (Fed, the United States central bank) warned this Wednesday that the tariffs announced by US President Donald Trump will cause inflation. Given this scenario and the growing "uncertainty" in the US economy, the monetary institution has once again left interest rates unchanged.

"It will be very difficult to have an accurate assessment" of the impact of the tariffs, declared Fed Chairman Jerome Powell in Washington. "The answer to the question is that they will have a significant impact," he added when asked about the effect of the US president's trade policy, which has announced (and, in some cases, temporarily suspended) substantial tariff increases on imports from Canada, Mexico, China, and the European Union, the United States' main trading partners. "With the arrival of the tariffs, the progress made on inflation could be set back," he emphasized.

Thus, the Fed has announced that it will keep the price of money unchanged, with base rates within the range of 4.25% to 4.5%. At the previous meeting, held in January, the Fed already chose to leave unchanged the price of money after a quarter-point cut in December.

The monetary institution has also increased its forecasts for the evolution of prices in the US - the Fed forecasts that prices will grow on average by 2.7% this year in the US, two-tenths more than the January forecast - while it has reduced its economic growth forecast for 2024 from 2.1% to 1.7%. r maintain rates, especially in the current economic context: Powell has said that "uncertainty today is unusually high," which makes the US central bank's monetary policy difficult.

However, the president of the Federal Reserve has expressed confidence that inflation will continue to fall to the 2% that the organization sets as a long-term objective between next year and 2027. In addition, Powell has also highlighted that the US labor market is "close to full employment."

Trump's threats to Powell

Late last year, before taking office, Trump indicated he wanted to fire Powell, although he legally cannot do so because the Fed is an agency independent of the federal executive branch and his appointment, although proposed by Trump himself, has been ratified by Congress. However, the US president has recently succeeded in removing several positions from other agencies independent of the administration, despite the presumption that he had no legal authority to do so.

In this context, Powell was asked whether the White House could fire him, but he ruled it out. "I answered this question in this very room a while ago, and I have nothing new to say today," said the Fed chief, referring to his statements last December, when he denied that he could be fired by Trump.