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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.
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LampLighter
Joined 2013/04/13Visited 2025/07/10
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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." ...
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 | Reply
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 | Reply
@#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 | Reply
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