Boston Fed head expects inflation to rise under Trump’s import tariffs

US President Donald Trump's import tariffs will ‘inevitably’ raise the country's inflation rate in the near future, according to Federal Reserve Bank of Boston President Susan Collins. This outlook may justify keeping interest rates unchanged for a longer period, according to Bloomberg experts.

Last week, Federal Reserve Chair Jerome Powell said the US economy remains strong and that any potential acceleration in inflation is likely to be temporary. However, Collins noted that it is still too early to fully assess the economic impact of the tariffs. She also emphasized that current risks require particular caution in determining the Fed’s next steps.

Taking a wait-and-see approach, Collins is closely monitoring the effects of the tariffs on import prices, consumer spending, and inflation expectations, the report adds.

As Bloomberg notes, the Federal Reserve recently left interest rates unchanged, despite revising its forecasts for economic growth downward.