During a media interview conducted by CNBC on Monday, Boston Federal Reserve member Susan Collins warned about the potential impacts of large tariffs imposed by the Trump administration on the United States' trading partners.
Collins indicated in her remarks that these large tariffs could ultimately lead to a significant increase in domestic prices within the United States, suggesting that it might lead the economy into a third round of high inflation.
In addition, Collins' statements included the following: The Federal Reserve will closely examine the price level increases caused by tariffs all at once. The United States has limited experience in dealing with large-scale tariffs like those currently being witnessed. I see the U.S. economy in a good place overall so far. The labor market has been in good shape, and the U.S. economy is approaching full employment. It is appropriate for monetary policy to be patient and cautious, and there is no urgent need for the Federal Reserve to change interest rates at this time. There is currently nothing that would prompt us to lower rates again. There are several reasons why long-term interest rates are moving more slowly. The Federal Reserve must weigh the risks on both sides of the mandate regarding inflation and employment.
