Powell says Fed is hearing a ‘rising chorus of concerns’ about trade tariffs

James Lawler Duggan | Reuters

Federal Reserve Chairman Jerome Powell gives testimony on the economy and monetary policy before the Senate Banking Committee in Washington, July 17, 2018.

Federal Reserve Chairman Jerome Powell says American companies are getting more worried about tariffs and the trade war between the U.S. and China.

“We’ve been hearing a rising chorus of concerns from businesses all over the country about disruption of supply chains, materials cost increases,” he said Wednesday. “If this, perhaps inadvertently, goes to a place where we have widespread tariffs that remain in place for a long time, a more protectionist world, that’s going to be bad for the United States economy.”

On Monday, the Trump administration’s 10 percent tariffs on about $200 billion of imports from China took effect. In retaliation, China instituted tariffs on U.S. goods worth $60 billion.

Powell was asked if he sees the administration’s tariffs affecting economic growth and inflation.

“It’s a concern. It’s a risk. You could see prices moving up,” he said. “The tariffs might provide a basis for companies to raise prices in a world they’ve been very reluctant and unable to raise prices. … We don’t see it in the numbers [yet].”

The central banker spoke at a news conference after the Federal Open Market Committee, the central bank’s policymaking group, concluded its two-day meeting.

Powell took over the reins of the Fed earlier this year from Janet Yellen, who served from 2014 until February.