Tariffs could take into account Fed’s plans to cut a rate in the midst of inflation care, experts say

Report on inflation hot of January expectations and uncertainty to the influence of the president Donald Trump Tariff plans for consumer prices could be able to consider deciding to reduce federal reserves, experts said.

The Ministry of Labor on Wednesday announced the consumer prices index (CPI) for January, which showed that inflation is 3% on an annual basis, compared to 2.9% a month ago, after the larger than the intended 0.5% monthly increase .

AND accelerate inflation Comes after the Fed has opted against the fourth consecutive decrease in interest rates at his meeting last month. Uncertainty about Trump’s plans for tariffs, which are taxes on imported products, and their time of implementation periods could lead to longer waiting for more reduction of rates than predicted.

“Today’s data confirm Powell’s decision to reduce the back on the rear burner over a long period of time,” said Charlie Ripley, a senior investment strategist for Allianz Investment Management. “Generally, today’s inflation data should force participants in the market to review the Fed ability to reduce rates this year, especially given the increase in prices is probably not related to any tariff activity from the White House.”

Inflation increases in January by 3%, warmer than expected

Bill Adams, Chief Economist Comeric Bank, said hot pressure inflation serves as “confirmation that the price pressures are still thrown under the surface of the economy” and “will” enhance the Fed preference on at least slow and may even reduce the final rate in 2025. . “

“Fed also watches the influence higher tariffsrestrictive immigration policy and tax reduction plans, “Adams added.” These policies could be added to inflation as their effects are failing through the economy, which is why the Fed kept interest rates greater than it would be under the status quo. “

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Seema Shah, the main global strategist for managing the main assets, said that the inflation report “would do for a very unpleasant reading for the FED” given the price growth and noted that “Vladine Agenda politics threatens to increase the expectations of inflation” – dynamics that would could lead that could lead to make inflation risks “too weighted to progress to allow the Fed to reduce rates this year.”

Eye Economist Gregory Daco said his company’s position is that the Fed “will maintain access and watch over the coming months” and that he currently sees only two decreasing Fed rates in June and December. “The risk is tilted to less relief if the management of the administration policy is encouraged by inflation and inflation expectations,” Daco explained.

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Ryan Sweet, the main American economist of Oxford Economics, said they were additional Tariffs on China Other threatening tariffs “have yet to enter into inflation information”.

“The Feda’s response to the tariff is not easy, but we do not believe that firmer monetary policy is probably because it would increase the withdrawal of the economy from the tariff,” Sweet said. “The Fed takes time to determine that the tariffs affect both sides of the double term, holding it paralyzed by December, when we think that his attention from inflation will be transferred to a full employment mandate, leading to aggressive mitigation of 2026.”

“The consequences of monetary policies are clear, but it is unclear whether the CPIs of January will give some in Trump’s administration pause about rapid movement forward with some of the suggested tariffs. The tariffs can still be used as a negotiating tool to get some concessions from other countries, but political optics If even a little increases the pressure on consumer prices through tariffs, it would not be great for Trump’s administration, “he explained.

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Federal reserves Jerome Powell He testified before the House Financial Services Committee on Wednesday and asked them about the impact of tariffs on the costs of the Americans’ costs and the central bank’s efforts to tame inflation, and the president noted that the FED commenting on policy decisions that did not have a discretionary right.

“Fed There is no role in placing tariffs and, you know, we do not comment on the decisions made by those who have this authority, “Powell said.” We try to adhere to our own knitting. In this particular case, it is possible that the economy developed in ways that they should have done something with their rate of politics because of the tariff, or partly because of the tariff. But we can’t know what it is until we really know what policies were brought. “