**POWELL DELIVERS BRUTAL TRUTH BOMB: Trump’s Tariffs Fuel Inflation Surge While Job Market Crumbles – Housing Affordability Hits Rock Bottom!**
In a stark contrast to President Trump’s rosy economic boasts, Federal Reserve Chair Jerome Powell delivered a sobering assessment on December 10, 2025, blaming sweeping tariffs for driving most of the recent inflation overshoot. Powell described the U.S. economy as “very unusual,” with tariff-induced goods price hikes persisting amid a weakening labor market that may already be overstating job gains.
Powell explicitly stated, “It’s really tariffs that are causing most of the inflation overshoot,” expecting the impact to manifest as a one-time price level increase peaking around Q1 2026, assuming no further tariff escalations. Core PCE inflation hovered around 2.8-2.9% in late 2025 data, elevated primarily due to import costs rather than domestic overheating.
On the labor front, Powell revealed Fed staff estimates suggest official payroll figures overstate growth by about 60,000 jobs per month since April, implying actual net job losses of roughly 20,000 monthly. This “systematic overcount” signals gradual cooling, with unemployment risks tilted downward.
Housing affordability remains a dire crisis, with the median age of first-time buyers reaching a record 40 years in 2025 – up sharply from prior decades. Powell warned that recent 25-basis-point rate cuts won’t significantly help, as low supply and pandemic-era low-rate mortgages lock owners in place.
“The housing market faces some really significant challenges,” Powell noted, emphasizing a structural shortage from years of underbuilding. “We don’t really have the tools to address a secular housing shortage” beyond adjusting rates, which alone can’t create inventory.
Despite three consecutive rate cuts in late 2025 bringing the federal funds rate to 3.5-3.75%, Powell signaled a potential pause, with divided FOMC members raising the bar for further easing amid sticky inflation and labor fragility.
Trump’s economic approval rating plunged to a record low of 31% in December 2025 AP-NORC polls, down from earlier highs, as Americans grapple with stagflation-like conditions: rising prices without robust wage or job growth.
As Powell prioritizes anchoring expectations to prevent persistent inflation, his candid remarks underscore a disconnect from Trump’s claims of the “greatest economy ever,” highlighting tariffs’ role in everyday affordability struggles and a bifurcated recovery favoring high-income consumers.
