Fed and White House disagree on impact of tariffs on US inflation

Federal Reserve (Fed) officials on Tuesday cited potential risks associated with price increases stemming from US import tariffs. The central bank indicated it will take a wait-and-see approach before adjusting interest rates, intending to analyze the impact of President Donald Trump’s trade policies on inflation. This was reported by Reuters.

As noted by Raphael Bostic, President of the Federal Reserve Bank of Atlanta, American businesses stocked up on goods in anticipation of tariffs, suggesting a potential price increase may follow. He expects only one small rate cut this year.

Beth Hammack of the Fed's Cleveland division and Mary Daly of the San Francisco Federal Reserve Bank echoed this cautious approach, supporting the view that the financial regulator should proceed strategically.

Meanwhile, Stephen Mnuchin, White House economic advisor at the time, dismissed concerns about inflation in the US. He stated that current and potential future tariffs would not lead to significant price increases.

Notably, last week Walmart, the world's largest retailer, warned of impending increases in the cost of goods. This statement prompted a response from President Donald Trump, Reuters noted.