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Fed’s Musalem Says It’s Too Soon to Know Tariffs’ Impact on Inflation
Federal Reserve Bank of St. Louis President Alberto Musalem stated on Wednesday that it is still too early to determine the full impact of recent U.S. tariffs on inflation. Speaking during a policy discussion, Musalem emphasized that while tariffs — particularly those recently imposed on Chinese goods, copper, and pharmaceuticals — could contribute to higher prices, the data available is not yet sufficient to draw clear conclusions about their long-term inflationary effects.
MARKETS
7/10/20251 min read
“We need more time and more evidence to assess how tariffs are influencing input costs, supply chains, and ultimately, consumer prices,” Musalem said.
The remarks reflect a cautious stance from the Fed as it continues to monitor inflation trends and adjust its policy approach. Analysts suggest that tariffs could complicate the central bank’s efforts to bring inflation back to its 2% target, especially if trade tensions escalate or global supply chains are disrupted.
Musalem’s comments come at a time when markets are closely watching every signal from the Fed regarding the timing of potential rate cuts later this year.