Fed Warns of Inflation Risks Amid Trump's Policy Shifts

The Federal Reserve has expressed growing concerns about inflation following policy suggestions from President Trump, according to the latest meeting minutes. The central bank's policymakers highlighted "upside risks to the inflation outlook," shifting focus from labor market concerns. Key risks identified include changes in trade and immigration policies, potential geopolitical shocks affecting supply chains, and unexpectedly robust household spending.

While there is a prevailing confidence that price pressures will stabilize, the minutes also reflected worries that several influential factors might hinder the anti-inflation trajectory. Some contacts from the Fed indicated that businesses could attempt to transfer increased input costs to consumers, particularly in response to potential tariffs. Additionally, an uptick in certain measures of inflation expectations has emerged as a key area of concern for Federal Reserve officials, signaling the need for ongoing vigilance in monetary policy.