Federal Reserve Chair Powell testified tariffs raised consumer costs in 2025.

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Federal Reserve Chair Jerome Powell testified to Congress that tariffs raised consumer costs in 2025. In his semi-annual monetary policy report to the Senate Banking Committee, Powell stated that tariff policies contributed to inflationary pressures and raised costs for American families. The Fed's own research, published by the Federal Reserve Bank of St. Louis, found tariffs explained roughly 0.5 percentage points of PCE inflation from June to August 2025. Powell explained that tariffs function as import taxes that businesses pass to consumers through higher prices. This creates a policy dilemma for the Fed: Trump's tariffs push inflation up, forcing the Fed to consider higher interest rates, which slows economic growth. Powell's testimony contradicts Trump administration claims that tariffs don't hurt American consumers. The Fed chair directly stated that tariff costs fall on U.S. households buying groceries and other goods. This represents the Federal Reserve's independent analysis contradicting White House messaging on who pays for Trump's trade policies.

Federal Reserve Chair Powell testified tariffs raised consumer costs in 2025.

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