Federal Reserve Maintains Rate Cut Outlook Despite Tariff Risks
Federal Reserve Governor Christopher Waller signaled potential rate cuts later this year, despite inflationary pressures from new tariffs. Speaking in Seoul, Waller emphasized that temporary tariff-induced price increases shouldn’t dictate monetary policy.
The central banker noted strong labor markets and progress toward 2% inflation provide flexibility to monitor trade developments. Market uncertainty persists as TRUMP administration tariffs face legal challenges and unpredictable implementation timelines.
Economists warn tariffs may ultimately slow growth, boost unemployment, and sustain inflationary pressures. The Fed’s current 4.25%-4.50% target rate remains in focus as traders weigh whether policymakers can deliver anticipated cuts before year-end.
