Former Vice Chairperson of the Federal Reserve: Trump will not affect the mandate and independence of the Federal Reserve, and tariffs themselves should not cause inflation

Randall Quarles, a former vice-chairperson of the Federal Reserve, said the Fed's independence, inflation and labour market would not be threatened even if President-elect Donald Trump takes office. Speaking on the sidelines of a forum on Monday, Mr. Quarles said there was considerable misunderstanding about the Fed's independence. Fed independence does not mean the president cannot have an opinion on Fed policy.
Quarles, a Trump appointee to the Federal Reserve, served as vice chairperson of regulation until 2021. Quarles said the tariffs themselves should not cause inflation, although at the margin they would instead prompt the Fed to cut interest rates. He also said he expected a large number of illegal immigrants to be deported after Trump took office, but that this would not affect the labor market. Quarles' comments came ahead of the release of the much-anticipated CPI report, which is likely to show that underlying inflation in the United States cooled only slightly at the end of 2024 against the backdrop of a strong job market and a solid economy, which could support the idea that the Fed is cautious about further rate cuts. (Kim X)