Federal Reserve Monetary Policy Report: It's Too Early to Assess the Impact of Tariffs on the Economy

US inflation has risen and labour market conditions are solid, the Federal Reserve said in its latest monetary policy report to Congress on Friday, but suggested the impact of Mr. Trump's tariffs may be just beginning to be felt and reiterated the Fed's view that it can wait for clearer conditions before taking action. "The impact of increased import tariffs on US consumer prices this year is highly uncertain as trade policy continues to evolve and it is too early to assess how consumers and businesses will react," the Fed said in the report. "While the impact of tariffs cannot be directly observed from official consumer price statistics, the pattern of net price changes across categories this year suggests that tariffs may have contributed to the recent pick-up in commodity inflation." The report also said the financial system had been "resilient" despite the uncertainty.