‘It acted badly and panicked’

For the Federal Reserve Bank, the American Central Bank, the risk is of lower growth in the American economy and inflation.

“Although uncertainty is still high, it is now clear that tariff increases will be significantly higher than expected,” Fed President Jerome Powell said. “It is likely that the same happens with economic effects, which will include higher inflation and slower growth,” he said.

Trump countered almost immediately. “He (Powell) is always late, but now he could change his image, and quickly,” Trump wrote. “Cut interest rates, Jerome, and stop playing politics,” he added.

One trade war between the world’s two largest economies is also what the institutions fear the most. On Thursday, the IMF (International Monetary Fund) released an alert and said the fees “threaten the world economy.”

IMF director-managing director Kristalina Georgieva argued that governments establish dialogue to prevent Trump from turning into a wave of retaliation. “We are still evaluating the macroeconomic implications of announced tariff measures, but they clearly pose a significant risk to global perspectives in a time of slow growth,” Georgieva said.

“It is important to avoid measures that may further damage the world economy. We appeal to the United States and their business partners to work constructively to solve commercial tensions and reduce uncertainty,” he said.