Investing.com -- Federal Reserve Governor Adriana Kugler expressed on Monday that some of the recent inflation in goods and market-services might be an anticipation of the effects of the current policies of the Trump administration. She emphasized the importance of the Federal Reserve’s role in maintaining inflation stability.
Kugler, speaking at Harvard University after a lecture on inflation dynamics, highlighted the potential impact of tariffs on core import prices and the shortages index. These factors, she suggested, are crucial to consider when trying to understand what drives inflation.
The Federal Reserve remains committed to its 2% inflation target, according to Kugler. While short-term inflation expectations have seen an increase, she assured that long-term expectations remain well anchored. She stressed the importance of ensuring that inflation does not escalate.
Kugler refrained from commenting directly on the potential impact of new tariffs on household prices. She acknowledged that it is yet to be determined how much of the increased costs businesses will pass on to consumers. Recognizing the strain that rising prices can put on households, she reiterated the need for the Federal Reserve to maintain its focus on managing inflation.
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