Fed’s Kugler Warns of Prolonged Impacts of Tariffs On Inflation

Rolling announcements, possible retaliation, impact on expectations all to hit CPI

by Eamonn Sheridan
Forex Live

Federal Board Governor Kugler in Q&A now:

  • Fed does not comment on administration policies but looks at how it will impact mandates for prices and jobs
  • There may be reasons why tariffs have more prolonged effects
  • Tariffs on aluminum for example effect almost every sector of the economy through supply chains, will take longer to filter through
  • Rolling announcements, possible retaliation, impact on expectations could also yield a more prolonged effect on inflation
  • Reallocation effects could produce more inflation if the U.S. invests in areas where it does not have a comparative advantage

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