Powell has a plan to assess tariff inflation, but it's not easy
Coinjie.com reported that in the key task of measuring the impact of tariffs on inflation, Federal Reserve Chairman Powell has a strategy: distinguishing signals from noise. The scale and scope of Trump's comprehensive global tariffs have made this already difficult task even more challenging. Federal Reserve officials must decide this year whether to lower interest rates further to support the economy or to keep interest rates high for longer to curb inflation. Economists expect this series of tariff measures to tear the Fed apart by weakening economic growth and pushing up prices. To choose the right policy path, officials first determine to what extent the rise in inflation is related to tariffs, and then assess whether the rise may be temporary or more lasting. Compared to the tariffs during Trump’s first term, “this time, I do think the impact will be more diversified and therefore more difficult to determine”, said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives. "More goods are affected. More companies are affected." William English, a professor at Yale School of Management and former head of the Federal Reserve's Council, said that at a basic level, Fed officials will first focus on the relationship between price changes and imported goods affected by tariffs. “To some extent, they are inconsistent and maybe something else is happening,” English said.