01:56 PM EDT, 04/04/2025 (MT Newswires) -- The Trump administration's tariffs will likely drive inflation higher and slow down US economic growth, Federal Reserve Chair Jerome Powell said Friday.

Late Wednesday, President Donald Trump announced duties on imports from several countries, including China and Japan. A 10% base tariff rate takes effect for all nations Saturday, though there will be additional duties that vary by country. China responded Friday with its own retaliatory tariffs of 34% on US products.

Trump's move triggered a steep stock market sell-off Thursday that has extended into Friday, putting the three benchmark equity indexes on course for sizable losses for the week. The White House has previously proposed or implemented certain other tariffs on its key trading partners.

"While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected," Powell said Friday in remarks prepared for a speech at a conference in Arlington, Virginia. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth."

With tariffs expected to accelerate inflation in coming quarters, there's a possibility that the effects could be "more persistent," Powell said. Progress toward the Federal Open Market Committee's 2% inflation target has slowed recently, he added.

Last month, the central bank's FOMC left its benchmark lending rate steady for a second straight meeting. Policymakers kept their interest rate outlook intact through 2027 and downgraded economic projections.

While the economy is "still in a good place," many forecasters expect somewhat slower growth in 2025, Powell said Friday.

Government data showed Friday the world's largest economy added more jobs than expected in March, while the unemployment rate ticked up to 4.2% from 4.1% sequentially. Powell said the unemployment rate is "still in the low range" where it has held since early 2024. There are, however, "elevated risks" of higher unemployment, he said.

"We are well positioned to wait for greater clarity (on the overall economic picture) before considering any adjustments to our policy stance," Powell said. "It is too soon to say what will be the appropriate path for monetary policy."

In a Friday social media post, Trump called on Powell to "stop playing politics" and ease monetary policy, saying that inflation was down and jobs were up.

The odds that the FOMC will reduce interest rates by 25 basis points next month rose to 31% Friday from 19% a week ago, according to the CME FedWatch tool. The probability of rates remaining unchanged fell to 69% from 81%.

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