Fed minutes: If tariffs lead to higher-than-expected inflation, a tighter monetary policy stance would be appropriate

Odaily News The latest minutes of the Feds June meeting show that participants noted that if the imposition of tariffs leads to higher-than-expected inflation and lasts longer than expected, or if medium- or long-term inflation expectations rise significantly, then it would be appropriate to maintain a tighter monetary policy stance, especially if labor market conditions and economic activity are stable. However, if labor market conditions or economic activity weaken substantially, or if inflation continues to decline and inflation expectations remain well-anchored, then it would be appropriate to establish a less restrictive monetary policy stance. Participants noted that if high inflation is more persistent and the employment outlook weakens, the committee may face difficult trade-offs.