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After rate hike, economists weigh tariffs’ role in inflation
Economists say tariffs may have added 0.26% to 0.56% to excess core inflation as the Federal Reserve weighs further hikes.
- On Wednesday, the Federal Reserve raised its benchmark interest-rate range to 3.75%-4%, marking the first increase in three years as Federal Reserve Chair Kevin Warsh prioritized reducing inflation.
- Future Federal Reserve rate decisions could depend largely on President Donald Trump's policies, as the Federal Reserve Bank of St. Louis calculated tariffs contributed between 0.26% and 0.56% to excess core inflation from June 2025 to June 2026.
- Alfredo Carrillo Obregon, a policy analyst at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, cautioned against overstating tariff reach, noting trade accounts for only 25% of the U.S. economy.
- President Donald Trump decried the quarter-percentage-point increase and called for lower rates, while Congress passed a Russia sanctions bill Wednesday granting the president more tariff authority; Jason Sorens of the American Institute for Economic Research said the hike could slow short-term activity but bring lower long-term interest rates.
- The answer is not necessarily in the Fed's hands, Ryan Young of the Competitive Enterprise Institute suggested; ending the trade war with Canada, resolving the Iran conflict, and reducing tariffs would ultimately lower prices for Americans more effectively than rate decisions alone.
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14 Articles
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After rate hike, economists weigh tariffs’ role in inflation
(The Center Square) – The Federal Reserve raised interest rates for the first time in three years Wednesday, a move intended to reduce inflation — but whether the central bank raises them again could hinge largely on President Donald Trump’s…
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Total News Sources14
Leaning Left2Leaning Right3Center8Last UpdatedBias Distribution62% Center
Bias Distribution
- 62% of the sources are Center
62% Center
15%
C 62%
R 23%
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