World Immigration News

Fed calls out Trump trade, immigration policies as inflation risks

Release Date: 2025-01-09
Media: Axios
Summary: Federal Reserve officials are concerned that President-elect Trump's trade and immigration policies could drive inflation higher, complicating the U.S. battle against inflation. Higher tariffs and mass deportations may force the Fed to keep interest rates elevated for a longer period, creating a potential conflict with Trump’s policies.

While the Fed expects inflation to gradually decline toward its 2% target, it acknowledges that this process might take longer than previously anticipated. The impact of Trump's policies, including trade and immigration changes, along with other factors like geopolitical disruptions, consumer spending, and housing costs, could make inflation harder to control.

The Fed recently lowered interest rates but revised its projections, expecting fewer rate cuts in 2025 and inflation to persist longer than initially forecast. Officials have expressed concerns about the potential inflationary effects of Trump’s policies, though the details remain uncertain.

Fed Governor Christopher Waller, however, stated that he expects tariffs to have minimal long-term effects on inflation, which would not significantly influence his monetary policy decisions. The Fed’s focus on inflation remains strong as the potential impact of Trump’s policies on the economy remains uncertain.
Tags: USA

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