Trump tariffs, inflation, and unemployment could hit Americans hard in 2025, according to Federal Reserve Chair Jerome Powell. At a time when Federal Reserve inflation warning signals are flashing, Powell stated that sustained tariff increases would likely cause price spikes, slow economic growth, and push job losses higher, contributing to a crisis of Trump tariffs inflation & unemployment.
Let Jay Powell tell you how the Fed’s economic forecasts have evolved since the onset of the trade war. (Spoiler: Whether you’re focused on unemployment or inflation, our economic future looks a lot more grim.) pic.twitter.com/Dj8aQeDxXs
— Justin Wolfers (@JustinWolfers) May 7, 2025
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Trump’s Tariffs Risk Inflation Surge and Job Losses
“Perfect Storm for a Recession” Brewing
Alex Jacquez from the Groundwork Collaborative didn’t mince words, saying “barely 100 days into Trump’s second term, working families are already being crushed by sticky inflation and slowing growth.” The Federal Open Market Committee (FOMC) echoed this, noting that “the risks of higher unemployment and higher inflation have risen.” The combined effects are likely to fuel Trump tariffs inflation unemployment.
Powell specifically addressed Trump’s trade policies, warning that:
“if the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth, and a rise in unemployment.”
Donald Trump’s tariffs mean you could suffer higher prices and lose your job AT THE SAME TIME. Forget dolls, families will be forced to make impossible choices between necessities like food, housing, and health care.
— Elizabeth Warren (@warren.senate.gov) 2025-05-07T19:13:12.113Z
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Small Businesses and Workers in the Crosshairs
Former Labor Secretary Robert Reich pointed out that 80% of U.S. jobs come from small businesses, which are especially vulnerable to tariffs. He added that “the likely result: higher unemployment,” and noted that price hikes on essentials like baby supplies and tools are already squeezing households. Clearly, Trump tariffs inflation unemployment are at the forefront of concerns for small businesses.
Political Fallout and Public Perception
Senator Elizabeth Warren framed the stakes bluntly, stating “Donald Trump’s tariffs mean you could suffer higher prices and lose your job AT THE SAME TIME.” Reich questioned whether voters would connect the dots by the 2026 elections, asking “will consumers and workers realize Trump is the cause?”
Meanwhile, the Fed held rates steady at 4.25–4.5%, resisting pressure from Trump to cut. Powell insisted political calls had no influence, affirming “we’re always going to consider only the economic data.”
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