Fed Governor: Tariff impact may be more lasting, supports keeping policy unchanged

Odaily Planet Daily News: Fed Governor Adriana Kugler said early Thursday that it is appropriate to maintain the current interest rate level until the upward risks of inflation subside. In her prepared speech, she pointed out that changes in government policies, the recent stagnation of the cooling process of inflation, and rising inflation expectations are all key reasons for maintaining policy patience. "As long as the upward risks of inflation persist and economic activity and employment remain stable, I will support maintaining the current policy interest rate." Although in theory the impact of one-time tariffs on inflation should be short-lived, if it affects multiple areas of the economy and further pushes up inflation expectations, its impact may be more lasting. Data show that since reaching a 40-year high in 2022, the inflation level has improved limitedly recently. A survey by the University of Michigan showed that consumers' long-term inflation expectations climbed to a 32-year high in March. Kugler focused on the importance of stabilizing inflation expectations, pointing out that both short-term and long-term inflation expectations have risen recently. (Jinshi)