Jeff Schmid, president of the Federal Reserve Kansas City, said that he would remain “focused” on inflation and warned that recent import taxes in the USA can escalate prices and strengthen the rising inflation expectations. The prepared comments from Schmid did not apply to March CPI or the detention of some tariffs announced by President Trump.

Key attractions

• Tariff ads increased economic uncertainty, coincided with a decrease in moods and an escalate in brief -term inflation expectations.
• Compared to the previous year, there is a significant escalate in the risk of higher inflation, lower employment and growth.
• The growing possibility that the FED will have to balance the risk of inflation against growth and employment.
• He intends to remain focused on inflation, do not pull much after graduating from the theory that the tariffs can only have a short-lived effect on inflation.
• He is afraid that further growth may escalate inflation expectations, taking into account earlier high inflation.
• I do not want to risk the credibility of the Fed on inflation.
• The growing supply of US tax debt together with potentially decreasing demand is a recipe for higher interest rates in the long run.
• The US is entering a tough period from the position of strength, the labor market remained solid.