The Federal Reserve may have to reduce interest rates if President Donald Trump’s tariff pushes inflation to the top. Federal Reserve officials retained fixed rates in January, but the new meeting records that were released on Wednesday showed some serious concerns about the latest Trump identification threats to cars, semi -conductors and pharmaceutical preparations.
The Federal Open Market Committee (FOMC) has agreed that commercial policies can maintain inflation than the central bank’s goal by 2 %, delaying their plan to reduce monetary policy.
Speaking to reporters on Tuesday, President Trump said he was considering a 25 % tariff on the main imports, a step that may reach supply chains and raise prices through industries.
According to Federal Reserve preparations, officials warned that companies are likely to transfer higher costs to consumers, which may force the central bank to maintain high rates for a longer period – or eventually if economic conditions worse.
The Federal Reserve warns of definitions. The fighting can stop inflation
“The effects of potential changes in the trade and immigration policy, as well as the strong demand for consumers, have been martyred in the risks of inflation,” said January minutes.
Officials pointed out that companies in many federal reserve areas report concerns about the definitions that pay the costs of inputs, which leads to high prices on consumer goods. The minutes said:
“In support of its goals, the committee agreed to maintain the target scope of the rate of federal fund Data received, advanced expectations, and risk balance.
Trump’s commercial policies hold federal decisions
The latest Trump tariff plans will expand its current duties and provide new duties on cars, pharmaceutical preparations and semi -conductors – all sectors are very important to the American economy. The president has already imposed some customs tariffs on China, but his new proposal will take things more, and supply chains may be disrupted and put more pressure on prices.
“We are looking at a 25 % tariff for cars, large tariffs for medicines, and semi -conductors – we have to protect American jobs,” Trump told reporters on Tuesday. Although he did not give a schedule, he made it clear that his administration was progressing strongly.
Despite the concerns about Trump’s tariff, Wall Street’s profit reports were strong, as many companies have chosen focusing on business coming for business rather than commercial risks. In a research note on Monday, the chief economist in Goldman Sach Jean Hatzius described the situation as “animal lives on definitions.”
Hatzius said that with the exception of energy companies, the real revenues increased in the fourth quarter of 2024 by 3.2 % on an annual basis, due significantly to flexible consumer spending. Companies also benefit from the Trump batch to cancel the restrictions, which strengthened the confidence of companies.
“The cancellation of organizational restrictions may not be in the short term, but the expectations of the broader optimism and expectations have been improved sharply … which enhances our view of Consensus Capex for 2025,” Hatzius wrote.
Manufacturing also sees gains. The Institute’s Procurement Manager Index (ISM) for manufacturing has reached its highest level in the past two years, indicating a strength in the sector. Hatzius added that increasing spending on new factories, artificial intelligence and tax incentives will lead to the growth of business in business by about 5 % this year.
“The committee will be ready to control the position of monetary policy as necessary if the risks that can hinder the achievement of the committee’s goals appear. The committee’s evaluations will take into account a wide range of information, including readings in the conditions of the labor market, inflation and inflation expectations, And financial and international developments.
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