Donald Trump’s global tariffs assault is set to raise prices and slow down economic growth, Federal Reserve chair Jerome Powell has warned, defying the US president’s demands for an immediate interest rate cut.

While the US economy remains robust, Powell cautioned that there is high uncertainty over its direction. “Downside risks have risen,” he told an event in Arlington, Virginia, on Friday.

The Fed chair stressed that the tariffs unveiled by Trump this week were markedly more extensive than expected – and warned the impact would likely be larger as a result.

Trump promised to bring down prices while campaigning to win back the White House last year, and erroneously claimed on Wednesday they were “way down”, despite inflation holding firm.

But prices are likely to rise as a result of his tariffs plan, according to Powell, echoing the predictions of many economists.

“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” said Powell. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.

“The size and duration of these effects remain uncertain. While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”

Minutes before Powell was due to speak on Friday, Trump used a social media post to repeat his call on the Fed to lower rates. “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,” the US president wrote. “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

Trump’s extraordinary public interventions on rates have raised fears that the Fed’s independence is now at threat. Powell has maintained the central bank will only cut rates when policymakers decide it is the right time to do so.