Washington, DC – The chairman of the US Federal Reserve (the central bank) warned that new tariffs imposed by the US administration on a number of imported goods could lead to a significant increase in inflation rates in the coming months. This could hinder the bank’s efforts to lower prices and restore monetary balance.
The Federal Reserve chairman explained that recent trade policies are raising production costs and prices for American consumers. He affirmed that the U.S. economy remains strong, but is “vulnerable to pressure if tariffs continue to expand.” He noted that the repercussions of these measures could extend to global markets and increase price volatility.
He added that the Federal Reserve would proceed “very cautiously” with any interest rate decisions in the coming period. He emphasized that continued price increases due to political and trade factors could force the bank to reconsider its monetary easing plans, which were intended to support growth and investment.
Analysts believe the Federal Reserve chairman’s remarks represent an early warning sign of renewed inflationary pressures. These pressures could slow the global economic recovery, especially given rising energy and raw material prices and escalating trade tensions between the United States and its major trading partners.
As markets continue to await Washington and Beijing’s response to the escalating trade tensions, the question remains: can monetary policy alone contain the “inflationary fire” ignited by policy decisions?
