Jerome Powell weighed in on the state of the US economy Wednesday, and while the Fed is holding rates steady, its chairman’s outlook wasn’t entirely reassuring. Unsurprisingly, he pointed to Donald Trump’s polices as one reason why inflation is reigniting. The central bank sharply reduced its 2025 growth projection and Powell noted that uncertainty around the slowing economy is increasing. “Inflation has started to move up,” he said, adding that “there may be a delay in further progress over the course of this year.”

Investors have reacted negatively to Trump’s global trade war and the mounting retaliation from abroad, with the S&P 500 falling close to 10% from mid-February. Trump meanwhile has done little to ease recession fears, with the Republican saying the economy faces a “period of transition” and that his tariffs will eventually mean more US jobs. Some economists have suggested the opposite, dubbing tariffs a “lose-lose.”