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The United States Central Bank has warned that Americans may battle higher prices if the country’s President Donald Trump goes ahead with some of his proposed tariffs.

Minutes from the Federal Reserve’s January meeting released on Wednesday revealed that members of its committee believe Trump’s policies might “hinder the disinflation process’, detrimental to the US economy, BBC reports.

“Business contacts in a number of districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs,” the minutes said.


The release of the comments comes as the Fed faces criticism from Trump for not cutting interest rates sooner after leaving rates unchanged in the January meeting.

The Fed minutes also revealed “elevated uncertainty regarding the scope, timing, and potential economic effects of possible changes to trade, immigration, fiscal, and regulatory policies.”.

“A couple of participants remarked that, in the period ahead, it might be especially difficult to distinguish between relatively persistent changes in inflation and more temporary changes that might be associated with the introduction of new government policies,” the minutes added.

Accordingly, Fed minutes also showed the central bank’s readiness to hold rates steady amid stubborn inflation and economic-policy uncertainty.

The central bank left the key interest rate unchanged in a range of 4.25 percent to 4.5 percent in the January meeting, indicating pause after a string of cuts late last year.

Recall that the Fed’s chair, Jerome Powell, has previously said the bank was not “in a hurry” to cut more, given significant uncertainty about where the economy might be headed.

Since Trump’s inauguration in January 2025, he has rolled out several tariffs hitting China, Canada, Mexico, and other countries.

The latest was Trump’s plan to impose auto tariffs in the neighbourhood of 25% and similar duties on semiconductors and pharmaceutical imports.


https://dailypost.ng/2025/02/20/americans-may-face-higher-prices-us-fed-warns-trump-over-tariffs-spree/