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Federal Reserve Board Chairman Jerome Powell testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill February 27, 2018 in Washington, DC.

Federal Reserve Chair Jerome Powell opted against wading too far into the tariff battle during a speech Friday, though he acknowledged it’s a concern for business.

“It’s too early to say” what effect a potential trade war between the U.S. and China would have on the economic outlook, the central bank chief said at an event in Chicago.

Should the situation escalate, it could be inflationary, he added.

“Tariffs can push up prices, but again it’s too early to say whether that’s going to be something that happens or not,” Powell said during a question-and-answer session that followed his first economic speech since he took the Fed reins in February.

Businesses have expressed concern about the impact of a further trade battle. President Donald Trump on Thursday said the administration is looking into whether another $100 billion in tariffs would be appropriate against Chinese goods.

“We did hear from a number of business leaders around the country that changes in trade policy had become a bit of a risk to the medium-term outlook,” Powell said.



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