Here We Go Again: Fed Chair Powell Warns That Inflation Is 'Transitory' Because Of Trump's Tariffs

Be prepared for a new wave of inflation to come barreling at us this Summer.

Following the Federal Reserve’s recent decision to maintain interest rates steady at 4.0% for the time being, Fed Chair Jerome Powell and economists predict the pace of inflation will rise again this year as job growth is expected to stagnate. Powell, to the chagrin of some, reused the word “transitory” to describe where rising inflation will go.

“Transitory” was an often-used buzzword starting in 2021 by Powell and President Biden’s Treasury Secretary Janet Yellen, a former Fed head, claiming that the spike in inflation at the time was only going to be temporary, at a time when the Federal Reserve still maintained near-zero percent interest rates, still maintained quantitative easing policies, while the Biden administration was issuing more stimulus and passing hefty trillion dollar spending packages.

After a whole year of the pace of inflation continuing to climb higher and higher each month, Treasurer Yellen eventually admitted she got it wrong, but did not point to their own policies as the reason why inflation dramatically rose.

“I think I was wrong then about the path that inflation would take.”

At the most recent FOMC meeting, Powell alluded inflation is starting to rise again but still downplayed the risks.

The WinePress covered some of his remarks on Thursday, writing:

During Fed Chair Jerome Powell’s press conference, Powell indicated that the Fed is still eying at least two 25 basis point cuts this year, even though they admit little to no progress will be made on inflation. Powell stated there is a “high-level of uncertainty,” referring to Trump’s policies.

Powell’s rhetoric indicates that even though they don’t plan on making any progress in slowing the pace of inflation, they also see the potential for increased layoffs and the overall economy will weaken, therefore justifying the potential for rate cuts.

Powell also tried to claim the U.S. has a “pretty good economy,” but Americans don’t agree because their grocery bills and other cost of living expenses are so high, though Powell said that was because of dramatic price increases from the past several years and not is reflective of the current state of the economy.

Federal Reserve Still Pauses Interest Rate Cuts As They Forecast Inflation Not Going Away, Trump Policies Cause Confusion

Based on Powell’s and the Fed’s remarks, Powell dusted off the word ‘transitory’ yet again.

A reporter asked if the Fed is “back at transitory again,” to which Powell then responded:

“So I think that’s kind of the base case. But as I said, we really can’t know that. We’re going to have to see how things actually work out.

“It can be the case that it’s appropriate sometimes to look through inflation, if it’s going to go away quickly, without action by us, if it’s transitory. That can be the case in the case of tariff inflation. I think that would depend on the tariff inflation moving through fairly quickly and, critically, as well on inflation expectations being well anchored.”

Another press reporter later challenged Powell on his transitory comments. Craig Torres from Bloomberg asked: “You said transitory price increases from tariffs are the base case—transitory is the base case. Wasn’t it the base case last time? And didn’t the FOMC forecast lower inflation ahead last time? And wasn’t the lesson that it quickly got into services—haircuts, daycare, everything else? And so I’m just wondering why the nine aren’t taking that on board, and are cutting twice this year.”

In response, Powell asked if the reporter was referring to “the pandemic,” which Torres said he was, to which Powell then doubled-down and even tried to maintain the notion that inflation was “transitory” during the Biden administration.

“In which case, the inflation was transitory. Yeah, no, of course we’re well aware of that. And, you know, it’s still the truth. If there’s an inflationary impulse that’s going to go away on its own, it’s not the right policy to tighten policy, because by the time you have your effect you’re—you know, you’re in effect—by design, you are lowering economic activity and employment. And if that’s not necessary, you don’t want to do it. In real time, as we know, it’s hard to make that judgement. So—and were well aware, you know, of what happened, obviously, with the pandemic inflation.

“But, I mean, we have to look at this as it’s a different situation. There are differences and similarities. I mean, it’s a different time. You know, we haven’t had real price stability fully reestablished yet. And we have to keep that in mind. And, you know, we also have—we hear that people are very reluctant to take on—you know, to allow prices to go up. At the same time, we hear that businesses are intending to pass many of these prices through. So it’s hard to say how this is going to work out.”

However, Powell’s remarks interestingly did not phase the markets too much. CNBC noted:

In a speech last August at the Fed’s annual Jackson Hole, Wyoming, summit, Powell even joked that “the good ship Transitory was a crowded one,” and he told attendees that “I think I see some former shipmates out there today.”

The room chuckled at Powell’s remarks, and the market Wednesday didn’t seem to mind the transitory talk. Stocks jumped as Powell spoke, and the Dow Jones Industrial Average closed up 383 points to 41,964, a reversal of fortune for a market in decline lately.

″‘Transitory’ is back, or at least that was the insinuation,” said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management. “The market reaction, to me, says that investors are willing to believe that tariffs and other policies won’t create lasting inflationary pressures and that the Fed can stay in control.”

President Donald Trump’s threats of tariffs have been confusing to say the least, one minute threatening hefty tariffs on different industries and other leading trading partners, then the next minute backtracking and reneging on the implementation and parameters of them.

The WinePress has already detailed what major industries, businesses and products that would be most affected by tariffs. A number of retailers and manufacturers have already said that they would pass on the additional costs onto consumers, thereby increasing inflation pressures.

Trump’s latest tariff trade war action is that the President now claims he wants to implement reciprocal and sectoral tariffs by April 2nd.

But once again, Trump has already taken a lukewarm posture on this, too.

“People are coming to me and talking about tariffs, and a lot of people are asking me if they could have exceptions. And once you do that for one, you have to do that for all.

“I don’t change. But the word flexibility is an important word. Sometimes it’s flexibility. So there’ll be flexibility, but basically it’s reciprocal.”

Be that as it may, the Trump administration continues to push the idea that it is not Americans who will pay the additional price but other countries will instead, something Press Secretary Karoline Leavitt said in a frustrated tone earlier this week, as highlighted by

World Affairs in Context

.

In response to the Fed’s decision to hold rates steady, Trump took to social media urging Powell to lower interest rates, something the President is a big proponent of.

“The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing. April 2nd is Liberation Day in America!!!”

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AUTHOR COMMENTARY

And yet, just a few weeks ago it was revealed the trade deficit hit an all-time record high in January as investors and companies are trying to manage this tariff confusion. As I previously noted, the trade deficit increased under the first Trump administration even before 2020, even though we were told the tariffs were going to rebalance trade (the same ruse being told now); and then those same tariffs remained in place by Biden and were only increased, and the trade deficit continued to climb and reset new records - and here we are again, with an administration that is trying to gaslight us into believing that other countries are paying the tariffs (just like we were told Mexico was going to pay for the border wall, remember?).

But it was never about helping us. “America first” only refers to big business and increasing the wealth of the fat cats. Trump made this clear in December:

“Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America, will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals. GET READY TO ROCK!!!”

It was never about investing domestically by Americans for Americans, no, no, it’s all about cheap labor and widening the burden on us all so the few at the top can exact even more wealth for themselves.

Flip-Flop: Trump’s New Love For H-1B Visas Completely Contradicts Campaign Statements, Cheap Labor Continues As Usual To Pacify Musk And The Corporate Agenda

George Gammon from Rebel Capitalist I think adequately explained why it’s not just the tariffs in and of themselves that are the problem, but the fact that the U.S. purposefully ties its hands and feet together making it much more difficult for domestic workers and companies to do business here that is both fair and equitable:

To me, that little gaggle succinctly explains why doing business in the U.S. is a joke, unless it is a foreign company investing here but brings no real benefit to homeborn American taxpayers. The tariffs make zero sense in this context. And I continue to keep hearing this oft-repeated ruse that, ‘well, the U.S. government used to be funded from tariffs’ - then drop income tax and stop nickel and diming me for everything on top of it! But the way the U.S. is structured, it allows for megacoporations and foreign investment to make a killing, import cheap labor and export jobs overseas, while we Americans have deliberately been made into fictionally illiterate feudal serfs on a giant plantation. That’s why small business is dead and corporations rule this country; and because this country is so stink’n over-unionized it incentivizes laziness and malaise, being overpaid for menial labor: what company wants to invest here? Other countries have nowhere near the amount of regulations the U.S. has here.

As for Powell - here we go again. If this liar is telling us inflation is “transitory,” then we KNOW inflation is going to climb back up.

The federally reported inflation data - really all the data at this point - is as fake as fake can be. Truflation reports U.S. aggregate inflation is at 26.6%, exceedingly higher than anything the federal government reports.

It’s amazing how Biden and his administration were chastised for such lies about inflation being “transitory,” but when Powell says it this time there is quietness.

So just be prepared for a new wave of inflation to come barreling at us this summer, amidst trade wars, amidst bird flu plandemics, amidst widening and expanding wars, amidst the Federal Reserve printing more money - anything and everything that can be done to inflate the currency will be done, so as to force us peons onto the new monetary system of CBDCs, stablecoins and tokenization.

Proverbs 14:15 The simple believeth every word: but the prudent man looketh well to his going.

Proverbs 22:3 A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished. [7] The rich ruleth over the poor, and the borrower is servant to the lender.

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[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).

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