There is more work to do on inflation – Crypto News – Crypto News
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Price increases ahead of tariffs could spell trouble for inflation Price increases ahead of tariffs could spell trouble for inflation

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There is more work to do on inflation – Crypto News

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St. Louis Federal Reserve (Fed) President Alberto Musalem indicated that he was closely monitoring whether a rise in short-term inflation expectations was seeping into longer-term ones, noting that such a development could complicate efforts to combat inflation and diminish the Fed’s flexibility in addressing labour market weaknesses.

Key Quotes

  • Distinct possibility that inflation rises even as labour market softens.
  • Appropriate to lean against tariff-induced ‘second-round’ inflation that may be persistent.
  • Inflation expectations must remain anchored for a Fed policy that’s responsive to both employment and price stability concerns to be feasible.
  • Uncertainty is high, Fed policy is well positioned.
  • Downside risks to growth, employment have increased; notable headwinds for labour market.
  • Limited progress on inflation since mid-2024; risks of near-term rise have increased; more work to do.
  • Closely monitoring whether rise in near-term inflation expectations seeps into longer-term ones.
  • Bankers say loan demand softening, see consumer loan portfolios weakening, challenging conditions for agricultural sector.
  • Firms say they expect to raise prices due to tariffs, but also report consumers are increasingly price-sensitive.
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