Federal Reserve chief says Trump tariffs likely to raise inflation and slow US economic growth

ARLINGTON, Va. (AP) — The Trump administration’s expansive new tariffs will likely lead to higher inflation and slower growth for the U.S. economy, Federal Reserve Chair Jerome Powell said Friday.

Powell said that the tariffs, and their likely impacts on the economy and inflation, are “significantly larger than expected.” He also said that the import taxes will probably lead to “at least a temporary rise in inflation,” but added that “it is also possible that the effects could be more persistent.”

“Our obligation is to ... make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in remarks delivered to a conference of the Society for Advancing Business Editing and Writing.

Powell’s focus on inflation suggests that the Fed will likely keep its benchmark interest rate unchanged at about 4.3% in the coming months, rather than cut them anytime soon. Higher borrowing costs can help slow the economy and cool inflation. Wall Street investors, meanwhile, now expect five interest rate cuts this year, a number that has increased since President Donald Trump announced the tariffs Wednesday.

Powell also emphasized that the full impact of the tariffs on the economy aren’t yet clear, and the Fed will stay on the sidelines until it has more clarity about the economy. He acknowledged that many businesses have said they are holding off on new investments until they get a better sense of the tariffs' impact.

“There’s a lot of waiting and seeing going on, including by us," Powell said during a question and answer session. "And that just seems like the right thing to do in this period of uncertainty.”

Trump, separately, urged Powell to cut rates, citing lower inflation and energy prices on his social media platform, Truth Social.

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,” Trump wrote. “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

Economists expect that the tariffs will weaken the economy, possibly threaten hiring, and push up prices. In that scenario, the Fed could cut rates to bolster the economy, or it could keep rates unchanged — or even hike them — to combat inflation. Powell’s comments suggest the Fed will mostly focus on inflation.

Powell’s remarks come two days after Trump unveiled sweeping tariffs that have upended the global economy, prompted retaliatory moves by China, and sent stock prices in the U.S. and overseas plunging.

Powell's description of the impact of tariffs was more negative than just last month, when he said that any inflation resulting from the tariffs would likely be temporary.

Weaker growth and higher prices are a tricky combination for the Fed. Typically the central bank would reduce its key interest rate to lower borrowing costs and spur the economy in the event of slower growth, while it would raise rates — or keep them elevated — to slow spending and combat inflation.

“The Fed is in a tough spot with inflation set to accelerate and the economy poised to slow,” said Kathy Bostjancic, chief economist at Nationwide.

The Fed is required by law to seek maximum employment and price stability, which it defines as yearly inflation of 2%. Powell acknowledged that the tariffs, which could cause job losses and raise prices, could make both those goals harder to achieve.

“The two goals ... are in tension — or they may be,” he said.

Powell said the economy and hiring remain solid, for now, but he noted that consumers and businesses have become more pessimistic about the future.

He also said inflation has fallen sharply from its peak in 2022, but said that recently progress toward the central bank’s 2% target “has slowed.”

Some positive news arrived Friday when the government reported that hiring accelerated in March, with 228,000 jobs added, though the unemployment rate ticked up to 4.2%, from 4.1%.

Yet those figures measure hiring in mid-March, before the scope of the duties became clear. The tariffs have also raised uncertainty about how the economy will fare in the coming months, which could limit businesses’ willingness to invest and hire.

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

Cars rest on a carrier at the BNSF Railway vehicle storage facility at the Port of Richmond on Thursday, April 3, 2025, in Richmond, Calif. (AP Photo/Noah Berger)

Cargo containers line a shipping terminal at the Port of Oakland on Thursday, April 3, 2025, in Oakland, Calif. (AP Photo/Noah Berger)

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

Federal Reserve Chairman Jerome Powell speaks at the SABEW Annual Conference Society for Advancing Business Editing and Writing Annual Conference in Arlington, Va., Friday, April 4, 2025. (AP Photo/Manuel Balce Ceneta)

HONOLULU (AP) — A doctor accused of trying to kill his wife on a Hawaii hiking trail pleaded not guilty in court Monday on an attempted murder charge.

Gerhardt Konig's wife says they were hiking in Honolulu last month when he grabbed her, pushed her toward the edge of a cliff, attempted to inject her with a syringe and then bashed her head with a rock, the woman wrote in a petition for a temporary restraining order against him.

The Associated Press does not name people who are victims of domestic violence unless they consent to be identified or decide to tell their stories publicly.

Since his indictment March 28, Konig has been held without bail.

Defense attorney Thomas Otake told the judge he plans to file a motion requesting bail. There should be some bail because Konig has no prior criminal record, Otake said.

Konig appeared for the brief hearing via video from the Oahu Community Correctional Center.

“Dr. Konig's not guilty plea this morning was not just a formality, but a substantive response to the allegation that he tried to kill his wife,” Otake said in a prepared statement he distributed to reporters before the hearing.

“There are two sides to every story, and thus far only one side has been shared,” Otake said. “The other side to this story will be shared within the court process at the appropriate time.”

If convicted, Konig could face life in prison.

The couple were visiting Oahu to celebrate her birthday while their two young sons stayed home on Maui with a nanny and family, according to the wife's petition filed in family court. A judge signed an order saying Konig must stay away from his wife and their children.

The petition for a restraining order said that in December, Konig accused his wife of having an affair. They have since been in therapy and counseling, she said.

In the petition, she also said her husband has sexually abused and assaulted her.

On March 24 during their recent trip, Konig suggested they go on a hike in Honolulu that she described in the petition as having “narrow ridge sections with steep drop-offs on both sides.”

What is known as “Pali Puka” trail is closed because the route is unsafe, the state Department of Land and Natural Resources said. Hikers often enter through a small clearing near a popular lookout point that offers stunning views of windward Oahu despite a warning: “Area Closed! Do not go beyond this sign.”

“During the hike, I became uneasy and informed Gerhardt that I did not want to continue,” the woman said in her petition. “Gerhardt hiked a little further and then came back to get me.”

At one point, he grabbed the woman by her upper arms and started pushing her toward the cliff's edge while yelling that he was sick of her, she said.

They began wrestling and she screamed and pleaded for him to stop, fearing for her life, the petition says.

During the struggle, she said he took a syringe from his bag and tried to inject her.

“I do not know what was in the syringe, but Gerhardt is an anesthesiologist and has access to several potentially lethal medications as part of his employment," she said, adding that she bit his arm in an attempt to defend herself.

He appeared to calm down, but then grabbed a nearby rock and “began bashing me repeatedly on the head with it," she said.

Two women on the trail saw what was happening and said they were calling 911.

The women helped her down the trail while Konig went in another direction.

Gary Soares, a parking lot attendant at the state park that includes the Pali Lookout, recalled Monday seeing a bloodied woman come down from the trail.

“She was bleeding from her head, so you know we just had to wrap her head, stop the bleeding,” he said.

Konig fled the scene, prompting an hourslong search and the closure of the park, police said.

“They locked down the whole Pali Lookout,” Soares said. “Everybody had to leave.”

An ambulance took the woman to a hospital and her husband was arrested that evening.

“It's sad because he's a doctor from Maui,” Soares said. “Doctors we should trust to care of us.”

Konig is an anesthesiologist at Maui Health, which operates hospitals and clinics in Maui County and is an affiliate of Kaiser Permanente. Maui Health said in a statement to media organizations that he was suspended pending investigation.

Kaiser Permanente said in a statement that Konig is not an employee, but is employed by an independent entity contracted to provide medical services. Kaiser said it has suspended his credentials and ability to treat patients pending investigation.

EDITOR’S NOTE: This story includes discussion of domestic violence. If you or someone you know needs help, please call the national domestic violence hotline: 1-800-799-7233 in the U.S.

The beginning of a hiking trail is seen where Hawaii doctor Gerhardt Konig allegedly attempted to kill his wife last month at the Nuuanu Pali Lookout, Monday, April 7, 2025, in Honolulu. (AP Photo/Marco Garcia)

Hawaii doctor Gerhardt Konig appears before a judge via video during an arraignment hearing after being indicted on allegation of attempting to kill his wife on Monday, April 7, 2025, in Honolulu. (AP Photo/Marco Garcia)

Hawaii doctor Gerhardt Konig appears before a judge via video during an arraignment hearing after being indicted on allegation of attempting to kill his wife on Monday, April 7, 2025, in Honolulu. (AP Photo/Marco Garcia)

Hawaii doctor Gerhardt Konig appears before a judge via video during an arraignment hearing after being indicted on allegation of attempting to kill his wife on Monday, April 7, 2025, in Honolulu. (AP Photo/Marco Garcia)

This image provided by the Honolulu Police Dept shows Gerhardt Konig. (Honolulu Police Dept via AP)

Hawaii doctor Gerhardt Konig appears before a judge via video, bottom right, during an arraignment hearing after being indicted on allegation of attempting to kill his wife on Monday, April 7, 2025, in Honolulu. (AP Photo/Marco Garcia)