Citibank: The Fed may not be too concerned about the inflation caused by Trump's tariff policy

Jinshi data January 8 news, the Trump administration’s radical tariff policy may lead to further inflation, but economic models show that this will be a one-time pump of price levels, rather than a long-term inflation spiral. Jay Bryson, economist at Bank of America, said this could convince the Federal Reserve to be more patient in dealing with tariff-induced inflation, especially in the case of a continued slowdown in the labor market. His view supports Bank of America’s benchmark expectations that the Federal Reserve will cut interest rates three more times this year, by 25 basis points each time. But Bryson warned that if the trade war becomes more protracted, such as a series of retaliatory measures, the Federal Reserve may have to take the consequences of inflation more seriously.