Federal Reserve Governor: Tariff Impact Could Be More Persistent, Supports Status Quo

BlockBeats News, April 3rd, Federal Reserve Governor Adriana Kugler said early Thursday that it is appropriate to maintain the current interest rate level until the risks of rising inflation subside. In a prepared speech, she pointed out that key reasons to maintain policy patience include government policy changes, the recent slowdown in the inflation cooling process, and rising inflation expectations.

“As long as the risks of rising inflation persist, and economic activity and employment remain stable, I will support maintaining the current policy rate.” Although theoretically the impact of one-time tariffs on inflation should be temporary, if it affects multiple sectors of the economy and further raises inflation expectations, its impact may be more lasting.

Data shows that after reaching a 40-year high in 2022, the level of inflation has seen limited improvement recently. The University of Michigan survey shows that consumer long-term inflation expectations in March climbed to a 32-year high. Kugler emphasized the importance of stabilizing inflation expectations, noting that both short-term and long-term inflation expectations have risen recently. (Jinse)