The Federal Reserve warns that the latest tariff threat may delay the process of cutting interest rates
2025-07-11 18:54:40
US President Donald Trump's newly announced tariffs have once again muddied the outlook for inflation, making it harder for him to support the interest rate cuts that Mr. Trump has strongly advocated, according to Chicago Federal Reserve President John Goolsby. In an interview on Friday, Mr. Goolsby revealed that market concerns about tariff-driven price rises had eased significantly over the past few months as Mr. Trump suspended plans for hefty bilateral tariffs proposed in April, which would have paved the way for the Fed to cut rates again soon. But the latest round of tariffs - including 35 per cent on some Canadian imports and 50 per cent on Brazilian goods from August 1 - could reignite inflation fears, forcing the Fed to stay on the sidelines until the situation becomes clear. " I hope the corporate world doesn't say'this brings us back to where we were on April 3 ', but it's hard to say the extent of the impact, "he admits.
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