Federal Reserve Chair Jerome Powell said the economic impact of new tariffs is likely to be significantly larger than expected, and the central bank must make sure that doesn't lead to a growing inflation problem.

"While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected," Powell said Friday at the Society for Advancing Business Editing and Writing annual conference. "The same is likely to be true of the economic effects, which will include higher inflation and slower growth."

Despite that view, in a question-and-answer session following his speech, Powell emphasized the central bank doesn't need to hurry to adjust interest rates as policymakers wait for more clarity on the administration's policies and their impact.

His remarks follow President Donald Trump's announcement of sweeping new tariffs on imports from across the globe, which has already begun provoking retaliatory responses from foreign governments.

Source: Bloomberg