Federal Reserve officials expressed concern last month over President Trump’s proposed tariffs and mass deportation measures, warning that these policies could fuel inflation. The central bank, which paused rate cuts after a series of reductions, noted that rising input costs might complicate the path to the Fed’s 2% inflation target.
According to meeting minutes released on Wednesday, policymakers from the United States Federal Reserve voiced concern last month on the possible inflationary consequences of President Trump’s immigration and trade policies.
On charges of unfair trade practices and inaction against drug traffickers, the president of the United States has threatened to levy massive tariffs on numerous trading partners of the United States.
In addition, he has committed to carrying out the largest mass deportation in the history of the United States, which many economists believe could have an influence on inflation, in addition to the imposition of tariffs.
After three straight rate cuts, the Federal Open Market Committee (FOMC) decided last month to stop and showed no urgency to keep decreasing its main lending rate.
Just days after Trump took office, the Federal Reserve decided to keep its target interest rate between 4.25 and 4.50%. This decision was made despite a small increase in consumer inflation.
The Federal Reserve stated in the minutes that “participants expected that, under appropriate monetary policy, inflation would continue to move toward 2%, although progress could remain uneven.” This statement was made in reference to the Fed’s long-term target of 2%.
Possible changes to immigration and trade policies have lawmakers worried that they would impede the disinflation process.
The minutes did not make any specific reference to Donald Trump by name.
The Federal Reserve stated that business contacts in several Fed districts had told them that companies would try to charge consumers more for inputs if tariffs were to be implemented.
American investors do not expect the Federal Reserve to decrease interest rates anytime soon, thanks to the slight increase in inflation and the growing trade uncertainty that has followed Trump’s announcement.
CME Group reports that futures traders currently attribute a likelihood of almost 80% that the Federal Reserve would not reduce interest rates by more than two quarter points this year.
“All told, the FOMC is in no rush to ease,” Samuel Tombs, the senior US economist at Pantheon Macroeconomics, wrote in a note to clients.
Luis Gochoco is a seasoned managing editor and writer with over a decade of experience covering politics, technology, gaming, and entertainment news. With a keen eye for breaking stories and in-depth analysis, he has established himself as a trusted voice in digital journalism. Luis is one of the key forces behind the success of GameNGuide, contributing to 12 million views through engaging and high-traffic content. He also played a pivotal role in generating 8 million views on International Business Times, shaping the platform’s technology and gaming coverage.
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