Federal Reserve Warns of Tariff-Driven Inflation Surge

The Federal Reserve has issued a warning about the potential for inflation to surge as a result of new tariffs imposed by President Trump. The Fed expects these tariffs to significantly impact economic growth and increase inflationary pressures. While the economic effects of tariffs will likely include higher prices and slower growth, employment risks are expected to decrease. This comes as the Fed grapples with the need to balance managing inflation expectations while avoiding hindering monetary policy options. The Fed’s March meeting maintained its policy interest rate at 4.25%-4.50% reflecting caution amid rising inflation concerns.