A. M. U.S. Federal Reserve Chairman Jerome Powell issued an alarming warning wednesday about the economic consequences of tariffs imposed by President Donald Trump’s administration.
During his statement, Powell was clear: “the tariffs are higher than expected and will likely have a more severe economic impact than initially anticipated”. This statement set off alarm bells in the financial markets, generating an immediate plunge in the main U.S. stock markets.
According to Powell, the implementation of these new tariffs could result in higher than projected inflation and significantly slower economic growth. In other words, while trade policies were expected to protect the domestic economy, current data reflect a pullback that could extend throughout the year. “We are moving further away from our targets”, the central bank leader added.
Following these statements, the stock market reacted strongly. Stocks fell on Wall Street and volatility soared, reflecting investors’ uncertainty about a possible prolonged slowdown. Importing, manufacturing and technology companies were the hardest hit, reflecting the sensitivity of the economic system to protectionist measures.
The World Trade Organization (WTO) also added to the tone of concern, announcing that the volume of world merchandise trade will fall by 0.2% in 2025. This projection contrasts sharply with the 2.7% growth that had been forecast before the start of the trade war, reinforcing the perception that the conflict is having global consequences.
The combination of Powell’s statements and the figures presented by the WTO underscores an uncertain economic outlook for the U.S. and the world.
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