Trump's Federal Reserve Nominee Downplays Tariffs' Impact on Inflation

BlockBeats News, February 18th, Federal Reserve Governor Waller stated that his basic view is that the new tariffs imposed by the Trump administration will only have a moderate impact on prices, and the Federal Reserve should try to ignore this when formulating monetary policy.

Waller stated that the uncertainty surrounding the impact of trade or other government policies should not deter the Federal Reserve from doing what it should do, just as the 2022 Russia-Ukraine conflict and the 2023 Silicon Valley bank collapse did not prevent the Federal Reserve from adjusting interest rates, even though both events raised questions about the economic outlook.

In his speech, Waller said, "I acknowledge that the impact of tariffs may be greater than I expected... But we also need to remember that other policies under discussion may also have positive supply effects and exert downward pressure on inflation."

Waller stated that he agrees that policy should remain unchanged until inflation subsides. However, he noted that this may only be a matter of time, pointing out that the recent "disappointing" increase in CPI may reflect issues with seasonal data adjustments rather than a rise in price pressures. Waller was appointed as a Federal Reserve Governor during President Trump's first term. (FXStreet)