Tariff Gambit Backfires: US Inflation Soars, Fed Chair Powell Blames Import Duties
America
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News18•29-01-2026, 14:15
Tariff Gambit Backfires: US Inflation Soars, Fed Chair Powell Blames Import Duties
- •Federal Reserve Chairman Jerome Powell states that tariffs on imported goods, not excessive demand, are the primary cause of rising inflation in the US.
- •Powell noted that high inflation figures largely reflect increased prices in the goods sector due to tariffs, while service sector price pressures are easing.
- •The Federal Open Market Committee decided to maintain interest rates between 3.5% and 3.75%, deeming the current policy appropriate as inflation remains above the 2% target.
- •Powell explained that tariff-related inflation is a one-time price increase that will likely peak and then decline, provided no new major tariffs are imposed.
- •Despite strong economic growth, robust consumer spending, and increasing business investment, the housing sector remains weak.
Why It Matters: US inflation is primarily driven by tariffs on imports, not demand, according to Fed Chair Powell.
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