Fed chief Jerome Powell warns that U.S. could face "supply shocks" [View all]
Source: CBS News
Updated on: May 15, 2025 / 2:07 PM EDT
Federal Reserve Chair Jerome Powell is cautioning that the U.S. could face an increase in supply shocks. The comes a week after the central bank announced it would hold interest rates steady amid a period of economic uncertainty.
"We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy and for central banks," Powell said Thursday at research conference in Washington, D.C., where U.S. bankers are meeting to discuss monetary policy.
Analysts have also warned that U.S. companies could face inventory shortfalls as a result of tariff-induced supply chain issues. Container bookings from China to the U.S. dropped as much as 60% following the pre-tariff spike in imports according to Flexport, a supply chain management company.
Powell acknowledged at the conference that the economic environment has changed since the Fed's last strategy meeting in 2020, when interest rates were far lower than they are today. "Longer-term interest rates are a good deal higher now, driven largely by real rates given the stability of longer-term inflation expectations," Powell said on Thursday, referring to interest rates adjust for inflation.
Read more: https://www.cbsnews.com/news/fed-powell-trump-tariffs-supply-shocks-2025/
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