Thursday, 11 September 2025
Jakarta
--:--
Tokyo
--:--
Hongkong
--:--
New York
--:--
Fed Governor Barr expects tariffs to cause inflation persistence
Wednesday, 25 June 2025 04:01 WIB | ECONOMY |Federal Reserve

Federal Reserve Governor Michael Barr said on Tuesday that higher import levies will likely put upward pressure on prices that may not be temporary, suggesting he is not rushing to cut interest rates.

"I expect inflation to rise due to tariffs," Barr stated during an event in Omaha, Nebraska aimed at gathering feedback on Fed policy and economic conditions from business and community leaders.

Barr warned that "higher short-term inflation expectations, supply chain adjustments, and second-round effects may cause some inflation persistence," while noting that tariffs could simultaneously slow economic growth and increase unemployment, which stood at 4.2% in May.

The Fed Governor emphasized uncertainty around tariff policies and their effects, stating that "monetary policy is well positioned to allow us to wait and see how economic conditions unfold."

His comments follow the Fed's decision last week to maintain short-term borrowing costs in the 4.25%-4.50% range. Fed Chair Jerome Powell reinforced this cautious approach during congressional testimony earlier on Tuesday, highlighting the central bank's "wait-and-see" stance as it evaluates tariffs' impact on inflation in coming months.

Barr's position differs from fellow Fed officials Christopher Waller and Michelle Bowman, who recently indicated they could support a July rate cut, believing tariffs would likely only create a one-time inflation increase.

"Monetary policy sometimes requires tradeoffs - a stance of policy that is necessary to lower inflation, for example, may also lower aggregate demand and slow the economy," Barr explained, adding that understanding how policy decisions affect households and businesses remains crucial to balancing economic goals.

Source: Investing.com

RELATED NEWS
White House tariff update on gold bars a 'welcome development...
Thursday, 11 September 2025 03:35 WIB

The White House update to its tariff schedule is a "welcome development" after challenges caused by a recent U.S. Customs ruling on gold bars, the London Bullion Market Association said on Wednesday. ...

Israel will kill Hamas leaders next time if they survived Qatar attack, Israeli official says...
Wednesday, 10 September 2025 23:24 WIB

If Israel failed to kill Hamas leaders in an air strike on Qatar on Tuesday, it would succeed next time, the Israeli ambassador to the United States said after the operation, which raised concerns it ...

Breaking News: US Annual PPI Inflation Falls to 2.6% in August, Compared to an Expected 3.3%...
Wednesday, 10 September 2025 19:39 WIB

Producer inflation in the United States, as measured by the change in the Producer Price Index (PPI), fell to 2.6% annually in August from 3.3% in July, the U.S. Bureau of Labor Statistics (BLS) repor...

US Nonfarm Payrolls benchmark revision points to 911,000 decrease in March 2025 level of employment...
Tuesday, 9 September 2025 21:13 WIB

The US Bureau of Labor Statistics reported on Tuesday that the preliminary estimate of the Current Employment Statistics (CES) national benchmark revision to total Nonfarm employment for March 2025 is...

Potential Trump tariff refund bill could top $1 trillion as Supreme Court fight looms...
Tuesday, 9 September 2025 05:05 WIB

The United States government has already collected tens of billions of dollars from President Donald Trump's "reciprocal tariffs." But that money and a lot more could end up being refunded if the Sup...

LATEST NEWS
Gold climbs to $3,646 as soft US PPI and geopolitical risks lift safe-haven demand

Gold price surges on Wednesday, up by over 0.60%, folllowing US inflation data, which increased speculation that the Federal Reserve (Fed) will resume its easing cycle at the upcoming September meeting. At the time of writing, XAU/USD trades at...

Swiss Franc gains after weak US PPI

The Swiss Franc (CHF) strengthens modestly against the US Dollar (USD) on Wednesday, with USD/CHF trimming intraday gains as the Greenback softens after softer-than-expected US Producer Price Index (PPI) figures further cemented market expectations...

Oil prices settle up over $1 after global tensions mount; oversupply caps gains

Oil prices settled higher on Wednesday by more than $1 a barrel as investors worried about possible supply disruptions after Poland downed drones in its airspace and the U.S. pushed for new sanctions on buyers of Russian oil the day after an...

POPULAR NEWS
Will Nonfarm Payrolls revisions hint at a 50 bps Fed cut next week
Tuesday, 9 September 2025 04:05 WIB

The United States (US) Bureau of Labor Statistics (BLS) will publish the 2025 preliminary benchmark revision to the Establishment Survey Data on...

Russian Forces Attack Power Plant In Kyiv Region, Ukraine's Energy Ministry Says
Monday, 8 September 2025 17:12 WIB

Russian forces attacked a thermal power plant in the Kyiv region as part of an overnight attack, Ukraine's Energy Ministry said on Monday,...

US Nonfarm Payrolls benchmark revision points to 911,000 decrease in March 2025 level of employment
Tuesday, 9 September 2025 21:13 WIB

The US Bureau of Labor Statistics reported on Tuesday that the preliminary estimate of the Current Employment Statistics (CES) national benchmark...

European shares end higher amid all eyes on French no-confidence vote
Tuesday, 9 September 2025 01:52 WIB

European shares finished higher on Monday, while French stocks also rose as investors stayed calm in the run-up to a no-confidence vote later in the...