Federal Reserve officials: Trump's tariff policy may drive up inflation

Federal Reserve officials stated that Trump's high tariff policy could trigger a global trade "tit-for-tat."

On November 10, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, stated that one of the core economic proposals of Trump 2.0 is to impose universal tariffs on all imports from all countries, and if it provokes retaliatory measures from global trade partners against the U.S., it could exacerbate long-term inflation.

Kashkari mentioned in CBS's "Face the Nation" that a one-time tariff "would not affect long-term inflation," but:

"The concern is that if a tit-for-tat situation arises, where one country imposes tariffs and another responds and escalates gradually, then the situation becomes worrisome and even very uncertain."

The Federal Reserve remains "cautious" and will not adjust policies for now

Currently, economists, Wall Street analysts, and industry leaders are concerned about the inflationary impact that Trump's tough trade policies may bring—especially as inflation in the U.S. has already begun to decline and the Federal Reserve is lowering interest rates.

On November 7, the Federal Reserve cut interest rates again, and as inflation approaches the 2% target, Kashkari indicated that another rate cut is expected in December, but this will depend on "the data at that time."

"We have made significant progress in reducing inflation, and I don't want to declare victory too soon; we need to complete the task, but we are currently on a good path."

Regarding Trump's other policy proposals, such as mass deportation of immigrants, Kashkari pointed out that the inflation risks remain unclear, so the Federal Reserve is still taking a "wait-and-see" approach and will not adjust policies for now.