Fed Governor: Tariff impact may be more lasting, supports keeping policy unchanged

CoinRank News: Adriana Kugler, a member of the Federal Reserve Board, said early Thursday that it would be appropriate to maintain the current interest rate level until the upward risks to inflation subside. In her prepared remarks, she pointed out that changes in government policies, the recent stagnation of the inflation cooling process, and rising inflation expectations are all key reasons for maintaining policy patience. As long as the upward risks to inflation persist and economic activity and employment remain stable, I will support maintaining the current policy rate. Although in theory the impact of one-time tariffs on inflation should be short-lived, if it spreads to multiple areas of the economy and further pushes up inflation expectations, its impact may be more lasting. Data show that inflation levels have improved limitedly recently after reaching a 40-year high in 2022. A survey by the University of Michigan showed that consumers long-term inflation expectations climbed to a 32-year high in March. Kugler focused on the importance of stabilizing inflation expectations, pointing out that both short-term and long-term inflation expectations have risen recently. (Jinshi)