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Fed’s Jefferson: Tariffs could lead to higher inflation
US Federal Reserve (Fed) Vice Chair Philip Jefferson said that recent inflation numbers suggest the Fed is still making headway toward its 2% target. However, he cautioned that the outlook has become less certain, with the threat of new import tariffs potentially pushing prices higher.
Key Quotes
- Current moderately restrictive policy rate in a good place to respond to economic developments.
- Recent inflation data consistent with further progress toward 2% goal, but future path uncertain due to tariffs.
- Watching closely for signs in hard data of weaker activity.
- Tariffs could lead to higher inflation, still uncertain if impact would be temporary or persistent.
- Expect lower growth due to trade policy but expect economy to still expand over the year.
- First quarter GDP data overstated deceleration in activity.
- Labour market still solid.
- Whether tariffs create persistent inflation depends on implementation, response of supply chains, other factors.
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
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