Concern about U.S. import duties “is clearly influencing how people are thinking about inflation this year,” New York Federal Reserve Bank President John Williams said.
by Jim Tyson
CFO Dive
Dive Brief:
– U.S. tariffs enacted on Tuesday will likely boost prices for imported consumer goods fairly soon, while prices for U.S. manufactured products made with imported goods will rise more gradually, New York Federal Reserve Bank President John Williams predicted.
– “Tariffs on consumer goods, especially, they do feed into import prices pretty strongly — that does filter into prices consumers pay — that happens relatively soon,” Williams said. “Tariffs that feed into the kind of intermediate inputs,” he said, “tend to pass through more gradually and maybe last a little bit longer in terms of effects.”
– Williams noted uncertainty in the outlook for U.S. trade, including the duration of tariffs and how targeted countries will respond. Interviewed during a Bloomberg webcast, he also emphasized that the “economy is starting in a good place,” with unemployment at 4% and inflation about 0.5 percentage point above the Fed’s 2% target.