Uncertainty Looms Over Trade Policies and Inflation

Federal Reserve Board of Governors member Christopher Waller addressed the Certified Financial Analysts Society of St. Louis, emphasizing the significant uncertainties surrounding upcoming tariffs, negotiations, and their potential implementation within 90 days.

Impact of Tariffs on Financial Markets

Waller reflected on the April 2 tariff announcement's effect on financial markets, citing uncertain trade and fiscal policy decisions as key reasons for his cautious approach. "I do not judge such policy actions. But I must base my policy decisions on the actions taken. Tariffs are the elephant in the room, so let's talk about them," he stated.

Inflation Concerns Amid Tariff Discussions

Discussing the core PCE inflation, the Fed's preferred measure, Waller warned it "could reach a peak close to 5% on an annualized basis in coming months," attributing this potential spike to the tariffs.