US Federal Reserve warns Trump's tariffs may increase prices
Published On Feb 19, 2025, 4:27 PM
The US Federal Reserve has warned that proposed tariffs by former President Donald Trump may lead to higher prices for American consumers. Minutes from the Fed's January meeting indicate that many members believe these tariffs could hinder the disinflation process, leading businesses to pass increased input costs onto shoppers. Additionally, the Fed is facing pressures regarding interest rate decisions amidst economic-policy uncertainty, with some members indicating that distinguishing permanent inflation changes from temporary ones may become challenging in the future.
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The warning regarding tariffs could lead to increased prices, potentially impacting consumer spending and overall economic growth. Investors may want to consider defensive stocks that historically perform well during periods of inflation, as well as sectors that can pass on costs to consumers.
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