ARLINGTON, Va — 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.