Federal Reserve Monetary Policy Report: Evaluating Tariff Impact on Economy Premature

In a report released to Congress on Friday, the Federal Reserve indicated that while US inflation has risen and the labor market remains strong, the impact of Trump's tariff measures may just be starting to show. The report reiterated the Fed's stance of waiting for clearer circumstances before taking action. The Fed stated, 'It is too early to assess how the increase in import tariffs this year will affect US consumer prices, as trade policies continue to evolve and it is premature to evaluate how consumers and businesses will react. Although the impact of tariffs cannot be directly observed from official consumer price statistics, the pattern of net price changes in various goods this year suggests that tariffs may be one of the reasons for recent commodity inflation.' The report also mentioned that despite the uncertainty, the financial system has remained 'resilient.'

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