Fed chair warns of economic risks from Trump's tariffs

Meanwhile in the U.S.

The Federal Reserve has acknowledged the likelihood of higher consumer prices and lower growth prospects in the face of rampant U.S. tariffs on its trade partners.

Park Kun-woo reports.

Federal Reserve Chair Jerome Powell has warned that the Trump administration's recent tariff policies could pose risks to the U.S. economy.

"The level of tariff increases announced so far is significantly larger than anticipated, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth."

Speaking at the Economic Club of Chicago on Wednesday, Powell said the tariffs are highly likely to cause "at least a temporary rise" in inflation, adding the impact could be more persistent.

While the Fed aims to find a balance between keeping inflation at around 2 percent and maximizing employment, Powell said tariffs are leading the Fed to move away from those goals.

"We will balance our maximum employment and price stability mandates, keeping in mind that without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans."

However, Powell also said the central bank will remain patient, holding off on any policy changes until it has a better understanding of how the current trade policies play out.

Following Powell's remarks, U.S. stocks tumbled on Wednesday.

The tech-heavy Nasdaq dropped more than three percent, while the S&P 500 and Dow Jones Industrial Average also fell.

Also on Wednesday, gold prices soared, once even hitting an all-time-high of just over 3-thousand-3-hundred-57 dollars per ounce.

Park Kun-woo, Arirang News.