Federal Reserve Chairman Jerome Powell believes “significant policy changes” pursued by the Trump administration may deviate from the Fed’s goals for the rest of the year.

Since returning to office in January, President Donald Trump has enacted various aggressive policies on immigration and trade. The president’s recently announced tariff policy includes 10% tariffs on nearly every country and higher so-called “reciprocal” tariffs on several others. Trump paused his higher tariff rates on most countries, except China, for 90 days as trade negotiations continue.

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While speaking at the Chicago Economic Club Wednesday, Powell said he believes the policy changes could move the Fed away from its dual goals of maximum employment and stable prices.

“My hope is that we’ll get through this and get back what we’re always going to be aiming for: maximum employment and price stability. That’s what we do. I do think we’ll be moving away from those goals, probably for the balance of this year, or at least not making any progress. And then we’ll resume that progress as we can,” Powell said.

Despite this, he said the domestic economy is “still in a solid position,” and employment is “at or near maximum” levels. Powell said the tariffs announced by the White House were “significantly larger than anticipated.”

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension. If that were to occur, we would consider how far the economy is from each goal and the potentially different time horizons over which those respective gaps would be anticipated to close,” he said.

Powell also said that despite the uncertainty surrounding the Trump administration’s evolving economic policy, the Fed would remain committed to its dual mandate.

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“We understand that elevated levels of unemployment or inflation can be damaging and painful for communities, families, and businesses. We will continue to do everything we can to achieve our maximum employment and price-stability goals,” Powell said.

Powell has been the Fed’s chairman since 2018 and was nominated by Trump during his first term. He is expected to be in his current role until at least next year after he was renominated by former President Joe Biden in 2022.