Fed officials flag rising inflation risks amid uncertainty over Trump policies, tariffs
Published On Feb 21, 2025, 8:19 AM
Federal Reserve officials have raised concerns about inflation risks due to the uncertainty surrounding President Trump's policies, particularly regarding tariffs. They note that businesses anticipate passing increased tariffs on to consumers, leading to higher prices. Despite a healthy labor market, Fed officials expressed caution, with some predicting the possibility of more interest rate cuts if inflation cools. However, persistent inflation could complicate their plans, forcing the Fed to either maintain higher rates or confront difficult trade-offs.
Stock Forecasts
XLY
Negative
The expectation of higher tariffs and inflation could negatively affect consumer sentiment and spending, which might hurt sectors sensitive to consumer discretionary spending.
QQQ
Negative
Increased inflation expectations can put pressure on the Fed to maintain or raise interest rates, which could impact growth stocks negatively, particularly in technology.
Related News
Trump Eyes a Bigger, Better Trade Deal With China
Feb 19, 2025, 10:24 AM
U.S. officials are considering whether they can strike a deal with China that would ramp up its purchases of American goods and investments in the United States.
Stock market today: S&P 500, Dow, Nasdaq futures falter with fresh tariffs, Fed minutes in focus
Feb 19, 2025, 7:08 AM
Investors are weighig Trump's latest tariff salvo and waiting for Fed minutes for insight into future policy.
Inflation soars on airfares and private school fees
Feb 19, 2025, 2:18 AM
The pace of price rises jumped to 3%, above expectations as well as the Bank of England's target.