Fed meeting notes potential impact of Trump policy raises inflation concerns

At a meeting about a week after Mr. Trump's inauguration on January 20, Fed policymakers said his initial policy proposals had raised concerns at the central bank about rising inflation. According to published meeting notes, participants "generally pointed to upside risks to the inflation outlook" rather than risks to the job market. "Potential changes in trade and immigration policy, the potential for geopolitical developments to disrupt supply chains or the impact of stronger-than-expected household spending were specifically mentioned." While participants remained confident that price pressures would continue to ease, "other factors were seen as likely to impede the disinflationary process", the meeting notes, including "some [Fed] regional business contacts indicating that companies will try to pass on higher input costs from potential tariffs to consumers". Participants also noted that some measures of inflation expectations, a key concern for the Fed, had "recently risen".