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Boston Fed Estimates Tariff-Induced Inflation to Delay Fed Rate Cuts
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Susan Collins of the Boston Fed noted that the Federal Reserve might cut rates later this year, but tariff-induced inflation may delay the normalization of monetary policy as confidence that tariffs will not disrupt inflation expectations needs to be built, according to foreign reports. Maintaining stable interest rates is currently the best approach until the true impact of tariffs on the economy is determined, Collins said. In her estimate, the effective tariffs of over 10% imposed by the US on imported goods will cumulatively raise the core PCE price index by 0.7 to 1.2 ppts, with most of this to be reflected this year. She believed that inflation would gradually fall back to the Fed's 2% target in the medium term. AAStocks Financial News |
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