Federal Reserve Officials Monitor Trump's Policies Impact on Inflation

Federal Reserve officials Michelle Bowman and Austan Goolsbee weigh in on potential inflation impacts of the Trump administration's policies. They express confidence in the decline of inflation but note policy changes add uncertainty to the path of interest rates, emphasizing gradual adjustments and careful assessment.

Federal Reserve officials, who represent differing views on policy, are closely watching Trump administration policies for potential impacts on inflation as they determine future interest rates. On Friday, both Fed Governor Michelle Bowman and Chicago Fed President Austan Goolsbee expressed confidence in inflation's continued decline, though the timing remains uncertain.

Bowman and Goolsbee noted that expected policies, like labor supply limits or import taxes, could add uncertainty to inflation and interest rate trajectories. While Bowman is seen as hawkish, focused on inflation, Goolsbee prioritizes job market concerns. Both maintain commitment to the Fed's 2% inflation target.

Adding to this complexity, administration officials have downplayed tariffs' inflationary effects, yet these measures previously led to rate cuts amid economic slowdown concerns. In the current economic context, with vigilant businesses and capacity concerns, officials warn of potential risks and emphasize the need for clarity on policy impacts.

(With inputs from agencies.)