Powell warns Trump’s prices are likely to turn on even higher inflation and slower growth

Jerome H. Powell, president of the Federal Reserve, warned that President Trump’s prices were likely to catch up even higher inflation and slower growth than initially expected, because he has taken a more optimistic tone on the prospects, despite the economy so far by remaining in a “good place”.

“Although uncertainty remains high, it now becomes clear that pricing increases will be considerably greater than expected,” he said. “The same goes for economic effects, which will include higher inflation and slower growth.”

Mr. Powell characterized the risks of this result, which, according to him, could include higher unemployment, as “high”.

“Although prices are very likely to generate at least a temporary increase in inflation, it is also possible that the effects can be more persistent,” he said in a speech at a conference in Arlington, Virginia on Friday.

“Avoiding this result would depend on the maintenance of long-term inflation expectations, well anchored, the size of the effects and the duration of the duration so that they go to prices,” he said. A higher inflation resulting from prices could appear “in the coming quarters,” he said.

Mr. Powell added that the “obligation” of the Fed was to ensure that an “occasional increase in the price level does not become a problem of inflation in progress”.