Federal Reserve Governor Adriana Kugler said on Tuesday that with U.S. import tariffs significantly larger than expected and likely to put upward pressure on prices, the central bank ought to keep short-term borrowing costs unchanged until inflation risks recede.
Kugler said she is carefully watching how the Trump administration’s trade, immigration, fiscal policy and regulatory changes impact inflation and the labor market, but the “significantly larger” than expected tariffs clearly had her attention.
“I am also monitoring any risks to the outlook, especially upside risks on inflation or downside risks to employment,” Kugler said in remarks prepared for delivery to the Heller-Hurwicz Economics Institute at the University of Minnesota.
Reuters