Thursday, July 10, 2025

Minutes show Fed divided over tariff-driven inflation

Federal Reserve officials debated whether tariff-driven inflation in the months ahead will be a one-time event or an ongoing problem, according to minutes of their last policy meeting released Wednesday afternoon.

Posted by LampLighter at 12:44 AM | 11 COMMENTS | permalink

Comments

More from the article ...

... Why it matters: The central bank is leaving interest rates paused for now, but the ultimate judgment over whether inflation is temporary or lasting will shape their willingness to cut rates in the months ahead.

Driving the news: Minutes of the Federal Open Market Committee meeting that concluded June 18 show a key disagreement -- whether the policymakers should look through any bump in prices due to new import taxes, or worry more about ongoing inflation.

- - - The minutes state that while "a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation." ...


#1 | Posted by LampLighter at 2025-07-10 12:45 AM

Yep, how do tariffs (or will tariffs) affect inflation?

If tariffs cause the prices to increase just once, but stay at that level after that, then the effect of tariffs on inflation is a one-time event.

If tariffs cause the prices to increase and, because of that, workers demand wage increases, eventually resulting in companies raising prices, well, then inflation may continue to rise.

Which might occur?

I have not a clue.


#2 | Posted by LampLighter at 2025-07-10 12:49 AM

@#2

Apparently, neither has the Fed.

From the article ...

... Federal Reserve officials debated whether tariff-driven inflation in the months ahead will be a one-time event or an ongoing problem ...

Minutes of the Federal Open Market Committee, June 17-18, 2025
www.federalreserve.gov


#3 | Posted by LampLighter at 2025-07-10 02:50 AM

"... Why it matters: The central bank is leaving interest rates paused for now, but the ultimate judgment over whether inflation is temporary or lasting will shape their willingness to cut rates in the months ahead.
#1 | Posted by LampLighter "

Typical ------- Fed - is this inflation in the room with them now? I ask as it sure the ---- is not seen in the economic data. Thus far under Trump policies, inflation is running 1.6% annualized. We are already 20% below their target rate but they sit with their thumbs up their asses worried about inflation they claimed would be seen in March, then April, then May, then June --- and they are still waiting.

#4 | Posted by ScottS at 2025-07-11 09:22 AM

Nothing says "Fiscal Conservative" like begging to make it cheaper to borrow money when the nation is already $37 Trillion in debt.

The problem with this economy is there's not enough debt!
--Republicans

#5 | Posted by snoofy at 2025-07-11 09:42 AM

Federal Reserve officials debated whether tariff-driven inflation in the months ahead will be a one-time event or an ongoing problem

^
Translation:
How long until TACO Tuesday?

#6 | Posted by snoofy at 2025-07-11 09:43 AM

Is "Taco Tuesday" common throughout the land, or mostly a Southern California thing?

#7 | Posted by snoofy at 2025-07-11 09:44 AM

Thus far under Trump policies, inflation is running 1.6% annualized.

You misspelled 3.05%.

Maybe the actual problem is your fantasy math isn't used by anyone but you and the other Trump sycophants.

#8 | Posted by jpw at 2025-07-11 11:55 AM

"Typical ------- Fed - is this inflation in the room with them now?"

Yes it is, in the form of tariffs, both existing and threatened.

Let's see if you'd pass an Econ 101 midterm: Of the ~$100 billion in US Tariff income, what percentage is paid by folks in America?

And is an additional cost of ~$70 billion more than usual an INCREASE in costs? Yes or No?

#9 | Posted by Danforth at 2025-07-11 01:04 PM

@#9 ... Thus far under Trump policies, inflation is running 1.6% annualized.

You misspelled 3.05%. ...

Current US Inflation Rates: 2000-2025
www.usinflationcalculator.com

... The annual inflation rate for the United States was 2.4% for the 12 months ending May, compared to the previous rate increase of 2.3%, according to U.S. Labor Department data published on June 11, 2025. The next inflation update is scheduled for release on July 15 at 8:30 a.m. ET, providing information on the inflation rate for the 12 months ending June. ...

Table: Annual Inflation Rates
...
2025
Jan: 3.0
Feb: 2.8
Mar: 2.4
Apr 2.3
May: 2.4
Jun: available July 15
...


#10 | Posted by LampLighter at 2025-07-11 01:26 PM

My numbers are from here.

www.clevelandfed.org

#11 | Posted by jpw at 2025-07-11 02:50 PM

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