Economists and investors will be looking for traces on how federal reserves are considering the goals of Trump administration, especially plans to impose tariffs on American imports.
“For me this year, Tariffs are really a savage map for macroeconomic policies,” said Claudia Sahm, the chief economist at the New Century Advisors -in the former Fed official. “I feel like at this point it just surpasses everything else.”
Fed has previously faced global trade wars – including Donald Trump during the first term. However, at that moment, neither the pressures of prices nor the aggregate demand were as strong as it is now. This time, the risk is that inflation inflation is more pronounced – and more permanent.
Definite response of Chairman Feda Jay Powell on the influence of tariff on interest rates as soon as it is unlikely today.
After voting in December, Powell said that he had “many, many factors” who determine that the collection of US imports would affect consumer prices, and that central bankers would “take our time” rather than hurry to conclusions.
Some economies observers envisioned executive commands on the first day of Trump’s second term. But at this stage, it is still not clear how many US president and self -described “tariff man” will be on US trade partners: trade limitations could be a disposable shock or prove slow combustion, comic books in the month – as the Scott Bessent Treasury wanted. Both trails have consequences for impacts on consumer prices.
