The US Federal Reserve has warned that tariffs proposed by President Donald Trump could lead to higher prices for American consumers. The central bank’s minutes from its January meeting revealed concerns that potential tariffs would be passed on to consumers, as businesses prepare for increased input costs.
Trump’s trade policies have sparked uncertainty among the Fed’s members, who are now worried about the economic effects of new government policies. The Fed has left interest rates unchanged, citing stubborn inflation and policy uncertainty, despite calls from Trump for lower rates.
Analysts predict that the Fed will not cut interest rates until 2025 at the earliest, and may not make any changes at all. Trump’s campaign promises include calls for lower interest rates, which would benefit borrowers but raise questions about the Fed’s independence.
Fed Chair Jerome Powell has maintained that the bank is focused on data-driven decisions, but faces challenges in maintaining its independence from the White House. The Fed’s handling of recent orders to cancel diversity programs and withdraw from a climate change-focused group have raised eyebrows, and will test Powell’s ability to navigate politics without compromising his decisions.
Source: https://www.bbc.com/news/articles/c62z3j3nydzo