Barclays: Fed's assumption of 'temporary' tariff pressure may catch it off guard

Odaily Planet Daily News - Barclays economists said in a report that Fed Chairman Powell's "temporary" remarks on tariff-related price pressures and his disregard for inflation expectations risk catching the Fed off guard, just as it did during the epidemic. Powell made it clear on Wednesday that the committee assumes that tariff-related price pressures will be temporary, although it is taking a "wait-and-see" approach to whether price pressures will play out in this way. "His tone seemed overconfident," Barclays said. The bank added that Powell was also reluctant to consider taking precautionary interest rate cuts to provide a buffer for the economy in the event of a severe deterioration in economic activity. This was foreshadowed by weak data indicators such as consumer confidence. They added that downplaying such risks could undermine the Fed's credibility, as the Fed appears to be on a very narrow path with double risks at every step. (Jinshi)