Quarles Discusses Fed Independence And Economic Outlook

According to BlockBeats, on January 13, former Federal Reserve Vice Chairman Randal Quarles stated that the Federal Reserve's independence, inflation, and labor market would remain unaffected even with President-elect Trump's inauguration. Speaking at a forum on Monday, Quarles noted that there is considerable misunderstanding about the Fed's independence, clarifying that it does not mean the President cannot express opinions on the Fed's policies. Quarles, appointed by Trump, served as the Vice Chairman for Supervision until 2021. He remarked that tariffs alone should not lead to inflation, although they might marginally prompt the Fed to lower interest rates. Additionally, Quarles anticipated a significant deportation of illegal immigrants following Trump's inauguration, but he believed this would not impact the labor market. These comments were made ahead of the highly anticipated Consumer Price Index (CPI) report, which might indicate that underlying inflation in the U.S. would only slightly cool by the end of 2024, amid a robust job market and strong economy. This scenario could support the Fed's cautious approach to further interest rate cuts.