The US Federal Reserve has warned that American consumers may face higher prices if President Donald Trump proceeds with his proposed tariffs. According to minutes from the Federal Reserve’s January meeting, members of its committee expressed concerns that Trump’s policies could hinder the disinflation process. Business contacts in several districts indicated that companies might pass on increased input costs from potential tariffs to consumers. The release of these minutes comes amid criticism from Trump for not cutting interest rates sooner, following the Fed’s decision to leave rates unchanged in January. The minutes also highlighted uncertainty regarding trade, immigration, fiscal, and regulatory policies. Some participants noted challenges in distinguishing between persistent and temporary changes in inflation due to new government policies. The Fed reiterated its readiness to keep rates steady amid persistent inflation and economic-policy uncertainty. The key interest rate remained unchanged at 4.25% to 4.5% during the January meeting. Fed Chair Jerome Powell emphasized there was no rush to cut rates further due to economic uncertainty. Analysts predict only one rate cut in 2025, if any. Trump’s calls for lower interest rates have sparked debate over whether he will respect the Fed’s independence. Powell stated he had no contact with Trump and that rate decisions are data-driven. However, recent White House orders, such as canceling diversity programs and withdrawing from a climate-focused central bank group, highlight the political challenges facing the Fed. — news from BBC.com
