Head of St. Louis Fed: Trump’s tariffs may keep US inflation high

The risk of inflation remaining above the US central bank’s 2% target, or even accelerating, has risen following new US tariffs on imports for major trading partners. This could intensify domestic price pressures, according to Federal Reserve Bank of St. Louis President Alberto Musalem.

The official warned that tariff-driven inflation acceleration could force the Fed to tighten monetary policy, though this scenario remains outside his baseline forecast.

The US Federal Reserve currently maintains a pause on rate hike discussions, anticipating a gradual easing of inflation that would enable rate cuts from the current 4.25%–4.50% target range.

The US Monetary Authority is currently evaluating how President Donald Trump's proposed trade policies may affect the national economy, including new tariffs on foreign-assembled vehicles.