Fed’s Collins sees steady Fed as tariffs push up inflation risks

Susan Collins warned that large trade tariffs would probably raise inflation and slow growth. She emphasized that core inflation could exceed 3% due to these tariffs, complicating the Federal Reserve’s monetary policy decisions.

Collins indicated that while the current monetary policy should remain unchanged for now, adjustments might be necessary later this year if inflation expectations worsen. This scenario underlines the need for the Fed to adopt a responsive approach to emerging economic conditions.