Federal Reserve Bank of Kansas City president Jeff Schmid stated on Thursday that U.S. President Trump’s tariff announcements have heightened economic uncertainty. He noted that the Federal Reserve may increasingly face the challenge of balancing inflation risks with concerns about growth and employment.
Schmid emphasised that in weighing this balance, he remains squarely focused on the inflation outlook and is unwilling to take any chances with the Fed’s credibility on inflation.
The official expressed scepticism toward the idea that tariffs will only have a temporary impact on prices, stating he would be hesitant to take too much comfort in that theory. He also stressed that, given the recent experience with high inflation, he is concerned that any further jump in prices could further push up inflation expectations.