From Yahoo Finance: 2025-05-09 17:34:00

Federal Reserve officials emphasize the risk of tariffs stoking inflation, highlighting the dilemma of lowering interest rates to boost the economy or keeping them high to control inflation. Despite Trump’s demands for lower rates, Fed officials resist, citing concerns of inflation. Uncertainty surrounds the economy’s response to tariffs and potential rate changes.

Fed officials stress the importance of maintaining inflation expectations to achieve price stability. Concerns over inflation risks from tariffs lead to the decision to keep interest rates steady. Policymakers debate the impact of tariffs on inflation and employment, favoring a cautious approach to assess the situation.

Fed governor Barr expresses concerns over tariffs potentially increasing unemployment as the economy slows. Uncertainty lingers over how tariffs will affect prices, with skepticism from Fed president Barkin about companies passing on import tax costs to consumers. Fed governor Waller highlights the value of central bank independence in making decisions beneficial for the economy in the long run.

Read more: Fed Officials Remain Focused On Possibility Tariffs Will Spur Inflation