Powell’s Speech: Fed Chair to Speak in Wake of Jobs Report, Trump Tariffs

Investors should be watching for whether Powell reiterates that tariffs can be looked-through on Friday, even in the face of President Donald Trump’s latest tariff increases. Under the latest plan, there will be a minimum 10% tariff on all imports of foreign goods starting Saturday, according to the White House. On Wednesday, the Trump administration will also impose higher, individualized tariffs ranging from 48% to 10% on countries with which the U.S. has the largest trade deficits.

Economists estimate those levies would raise the effective tariff to above 25%—much higher than the rate of less than 10% expected by markets.

The latest tariff announcement is expected to spur stagflation, a toxic combination of weak growth and high inflation, in the U.S. That could make it difficult for Fed officials to address weak growth with the usual medicine of cutting interest rates, lest that make inflation worse.

Powell previously noted following the Federal Open Market Committee meeting on March 19 that his base case was that higher inflation stemming from Trump’s tariffs proposed up to that point would be more “transitory.”

If Fed officials believe they can look through the current slate of tariff hikes, much like an oil price shock, it would open the door to further interest rate cuts if the economy starts to show signs of deterioration.