Two Federal Reserve officials said they expect weaker growth and higher inflation this year on account of President Trump’s tariff policies.
Boston Fed president Susan Collins told Yahoo Finance in an interview Friday that if Trump’s tariffs stay in place, inflation will rise, perhaps above 3%, and economic growth will slow.
New York Fed president John Williams also said Friday he now expects economic growth to slow this year to “somewhat below 1%” and inflation to rise between 3.5% and 4%.
Collins said she is hearing and seeing in surveys that many firms expect tariffs to take longer to really factor in because they need to understand their own pricing.
“I am rethinking my initial view that it may only take a couple of months if the tariffs were to be kept at a certain level,” she added.
From businesses in her district, she said, “what I hear is a pervasive wait-and-see approach as firms consider how to react to an environment that is highly uncertain.”
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