Trump promised that when he returned to the White House, he would impose comprehensive tariffs on imported commodities. During his first term, Federal Reserve staff simulated similar scenarios and concluded that inflation would accelerate but not last long. Because tariffs were eventually recognized to be a drag on the economy, they recommended lowering interest rates as the best remedy. However, taking this approach now faces two main obstacles. First, the Federal Reserve has not completely overcome the issue of post-pandemic price hikes. Second, the Federal Reserve faced severe criticism for describing that price hike as "temporary". Therefore, what Powell and his colleagues are most unwilling to do is underestimate the surge in prices, believing that they will not be long-lasting. Deutsche Bank's U.S.-based economist, Justin Weidner, said, "Even a price hike viewed as temporary may prompt the Federal Reserve to raise interest rates, or at least keep them on hold to prevent them from lowering rates significantly as they had originally hoped. They must acknowledge the actual inflation rate. Perhaps it is not necessary to use words like 'temporary' or 'temporary', but to say something like 'due to the tariff effect causing inflation to rise', clearly indicating that this is a result of tariffs rather than necessarily demand-driven."
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关税导致通胀或许是暂时的,但美联储不会这么说
Tariffs may cause inflation to be temporary, but the Federal Reserve will not say so.
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