Policymakers at the US Federal Reserve on Friday warned of higher inflation and slower growth ahead due to Donald Trump\u2019s tariff policy, which has sent shock waves through global markets.<\/p>\n\n\n\n
The US president imposed sweeping import taxes on dozens of countries, only to abruptly roll many of them back to 10 percent after stock and bond markets reacted sharply, while leaving China with new tariffs totaling 145 percent. <\/p>\n\n\n\n
Speaking to Yahoo Finance on Friday, Boston Fed President Susan Collins said she expects higher inflation and slower growth this year thanks to the tariffs, echoing the comments of many of her colleagues on the US central bank\u2019s rate-setting committee. <\/p>\n\n\n\n
\u201cThe higher the tariffs are, the more the potential slowdown in growth as well as elevation and inflation that one would expect,\u201d she said, adding she expects inflation to rise \u201cwell above\u201d three percent this year, but no \u201csignificant\u201d economic downturn.<\/p>\n\n\n\n
\u201cAt this point, my expectation is that we are likely to have to hold for longer than I had before,\u201d she said of the Fed\u2019s interest rates. <\/p>\n\n\n\n
Shortly after Collins\u2019s interview, a widely-referenced consumer confidence survey from the University of Michigan noted a sharp drop in consumer confidence, and flagged a worrying rise in both short-term and longer-term inflation expectations. <\/p>\n\n\n\n
\u201cYear-ahead inflation expectations surged from 5.0 percent last month to 6.7 percent this month, the highest reading since 1981,\u201d the survey noted. <\/p>\n\n\n\n
\u201cLong-run inflation expectations climbed from 4.1 percent in March to 4.4 percent in April, reflecting a particularly large jump among independents,\u201d it added. <\/p>\n\n\n\n
\u2013 \u2018Near-term risks\u2019 \u2013<\/p>\n\n\n\n
In a speech in Hot Springs, Arkansas, on Friday, St. Louis Fed President Alberto Musalem said \u201ccontinued vigilance\u201d and \u201ccareful monitoring\u201d of the incoming data was needed, amid the tariff-related turbulence.<\/p>\n\n\n\n
\u201cI expect the economic expansion will continue at a more moderate pace, the supply and demand for labor will remain roughly in balance, and inflation will decline to two percent over the medium term,\u201d he said, referring to the Fed\u2019s long-term inflation target.<\/p>\n\n\n\n
\u201cHowever, I see the near-term risks as skewed toward inflation rising alongside slower economic growth and a further cooling of the labor market,\u201d added Musalem, who is a voting member of the Fed\u2019s rate-setting committee this year.<\/p>\n\n\n\n
\u201cI would be wary of assuming the impact of high tariffs on inflation would be only brief or limited,\u201d he said. <\/p>\n\n\n\n
New York Fed President John Williams, a colleague of Musalem and Collins on the Fed\u2019s rate-setting committee, went further on Friday, putting out estimates of how he expects Trump\u2019s immigration and tariff policies \u2014 and the uncertainty around them \u2014 to affect the US economy this year. <\/p>\n\n\n\n
\u201cI now expect real GDP growth will slow considerably from last year\u2019s pace, likely to somewhat below one percent,\u201d he told a conference in Puerto Rico, according to prepared remarks. <\/p>\n\n\n\n
\u201cWith this downshift in the pace of growth\u2026 I expect the unemployment rate to rise from its current level of 4.2 percent to between 4.5 and 5 percent over the next year,\u201d he said. <\/p>\n\n\n\n
\u201cI expect increased tariffs to boost inflation this year to somewhere between 3.5 and 4 percent,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"
Policymakers at the US Federal Reserve on Friday warned of higher inflation and slower growth ahead due to Donald Trump\u2019s tariff policy, which has sent shock waves through global markets. The US president imposed sweeping import taxes on dozens of countries, only to abruptly roll many of them back to 10 percent after stock and […]<\/p>\n","protected":false},"author":1,"featured_media":8537,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[220],"tags":[3641,3642,1276],"class_list":["post-8536","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-fed","tag-inflation","tag-us"],"_links":{"self":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts\/8536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8536"}],"version-history":[{"count":1,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts\/8536\/revisions"}],"predecessor-version":[{"id":8538,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/posts\/8536\/revisions\/8538"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=\/wp\/v2\/media\/8537"}],"wp:attachment":[{"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/miaminewsnetwork.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}