Fed officials see inflation risks from Trump’s tariffs

The Trump administration’s plans for trade tariffs come with inflation risks, three Federal Reserve officials warned on Monday, with one arguing that uncertainty over the outlook for prices calls for slower interest-rate cuts than otherwise.

Trump on Saturday slapped across-the-board tariffs on the three largest U.S. trade partners, though by late Monday the leaders of Mexico and Canada had won a 30-day reprieve after they agreed to stepped-up efforts to stem drug trafficking. Tariffs on China are set to begin on Tuesday, and Trump has signaled he will impose duties on other trading partners as well.

“The kind of broad-based tariffs that were announced over the weekend, one would expect to have an impact on prices,” Boston Fed President Susan Collins said in an interview with CNBC, adding that “with broad-based tariffs, you actually would not only see increases in prices of final goods, but also a number of intermediate goods.”

Michael S. Derby & Howard Schneider | Reuters

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