Washington (Reuters) – The new customs duties imposed by US President Donald Trump, “larger than expected”, will probably feed inflation in the coming quarters and more persistent effects are also possible, the president of the federal reserve, Jerome Powell on Friday.

“We are faced with very uncertain perspectives with high risks of increase in unemployment and inflation, which would compromise the two Fed mandates, namely 2% inflation and maximum employment,” said the president of the American central bank in remarks prepared for a conference in Arlington, Virginia.

Jerome Powell’s comments are involved as the world markets dive for the second consecutive day after the White House tenant announced a series of new massive customs rights on Wednesday against its business partners.

The owner of the Fed did not directly address the stock market tumble, but recognized that the central bank was faced with the same uncertainty as that which strikes investors and companies.

The Fed, he said, still has time to wait for the publication of other data before deciding on how monetary policy must react, but central bankers will ensure that inflation expectations remain anchored, in particular if American surcharges cause a more persistent increase in prices.

“It is very likely that customs duties cause an at least temporary increase in inflation, but it is also possible that the effects are more persistent,” he warned.

“Our obligation is to maintain long-term inflation anticipations well anchored and to ensure that a punctual increase in the price level does not become a permanent inflation problem,” he added.

The president of the Fed said that he did not belong to the Central Bank to comment on government policies, but rather to react to the way in which they could affect the economy.

However, its comments highlight the tension that the Fed sees emerging between the “concrete data” which remains solid – the economy created 228,000 jobs in March with an unemployment rate of 4.2% – and the “non -concrete data”, such as investigations and interviews with companies, which indicate a slowness to come.

“We closely follow this tension between concrete data and non-concrete data. As new policies and their probable economic effects will become clearer, we will have a better idea of ​​their implications for economics and monetary policy,” he said.

“We do not make forecasts on the probability of a recession, but many external forecasters do it and many of them have increased the probability, although from very low levels,” he added.

(Report Howard Schneider, Diana Mandiá)

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