Washington, 4 April 2025 (dpa/MIA) - US Federal Reserve Chairman Jerome Powell on Friday said the latest tariffs are likely to lead to higher inflation and slower growth.

Powell said the central bank will wait for greater clarity before considering any adjustments to interest rates, citing a highly uncertain outlook due in part to the new tariffs announced by US President Donald Trump this week.

In remarks at the Society for Advancing Business Editing and Writing's annual conference, Powell noted that it will be very difficult to assess the likely economic effects of the higher tariffs until there is greater certainty about the details.

However, he said it is becoming clear that the tariff increases will be significantly larger than expected and the same is likely to be true of the economic effects.

"The size and duration of these effects remain uncertain," Powell said. "While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent."

He added: "Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices."

The Fed chief noted the central bank is obligated to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem.

Despite the uncertainty, Powell argued the Fed's current monetary policy stance is well positioned to deal with the risks and said the economy is "still in a good place."

He said the Fed will continue to carefully monitor incoming data, the evolving outlook and the balance of risks, and called it "too soon to say what will be the appropriate path for monetary policy."

The Fed's next monetary policy meeting is scheduled for May 6-7, with CME Group's FedWatch Tool currently indicating a 60.6% chance that the central bank will leave rates unchanged and a 39.4% chance of a quarter-point rate cut.

Last month, the Fed announced its widely expected decision to leave rates unchanged for the second straight meeting, but projections signalled the central bank is still likely to lower rates later this year.