Federal Reserve official Musalem: If Trump's tariffs cause a second round of inflation effects, the FOMC may remain inactive for a longer period

Wallstreetcn
2025.03.26 17:20

Musalem, President of the Federal Reserve Bank of St. Louis (2025 FOMC voting member): Maintain a cautious attitude towards the assumption that "the impact of tariffs on inflation will be temporary."

If tariffs cause a second-round inflation effect, the FOMC may remain inactive for a longer period.

The indirect effects caused by tariffs may lead to persistent inflation impacts.

The U.S. GDP growth rate is expected to be moderate in the first quarter and is expected to maintain this state.

The labor market remains stable, close to a state of full employment.

The risk that "inflation progress may stagnate or even rebound" has increased.

Patience and vigilance should be pursued in monetary policy

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