Reported 2 days ago
As President Trump considers increasing tariffs during his second term, the Federal Reserve is closely watching how these potential price hikes could affect public inflation expectations. With inflation currently experiencing fluctuations and a steady labor market, the Fed may respond more cautiously to tariffs than in the past, as past experiences show that consumer and business prices are more sensitive now due to recent high inflation rates. Fed officials emphasize the critical role of expectations in shaping economic behaviors, leading to the notion that the timing and manner of imposing tariffs could significantly influence the Fed's interest rate decisions.
Source: YAHOO