The Fed meeting notes that if tariffs lead to higher-than-expected inflation, it would be appropriate to maintain a stricter monetary policy stance

The latest Federal Reserve June meeting notes show that participants noted that if the imposition of tariffs results in higher-than-expected inflation that lasts longer than expected, or if medium- or long-term inflation expectations rise significantly, then maintaining a more restrictive monetary policy stance would be appropriate, particularly if labor market conditions and economic activity are stable. However, if labor market conditions or economic activity weaken materially, or if inflation continues to decline and inflation expectations remain well and stable, then establishing a less restrictive monetary policy stance would be appropriate. Participants noted that the Committee could face difficult trade-offs if high inflation is more persistent and employment prospects weaken.