Fed meeting notes: Tariffs put upward pressure on commodity price inflation

In its July meeting notes, the Federal Reserve noted that real GDP growth was moderate in the first half of the year. Unemployment remained low and consumer price inflation remained relatively high. The slowdown in inflation appears to have stalled, with tariffs putting upward pressure on commodity price inflation. Net exports turned from negative to positive in the second quarter, after a significant drag on GDP growth in the first quarter. Real imports of goods and services fell sharply, likely as a result of the subsequent impact of large imports brought forward in the first quarter in response to expected tariff increases. In contrast, exports of goods fell more modestly, while exports of services rose further.