Fed Chair Warns Tariffs Likely To Spike Inflation

Americans' expectations for near-term inflation have risen to their highest level since late 2023, with the Federal Reserve Bank of New York reporting that one-year inflation expectations climbed to 3.6% in March, up from 3.1% in February. This increase is largely driven by concerns over rising food and rent costs, while projections for gasoline and home prices rose more modestly. Despite this, longer-term inflation expectations remain relatively stable, with three-year forecasts holding at 3% and five-year projections slightly declining to 2.9%. The public's outlook on the economy has grown more pessimistic, with expectations for slower income growth and higher unemployment. These developments come amid President Donald Trump's aggressive tariff policies, which Federal Reserve officials and economists warn could further elevate inflation and slow growth. Fed Chairman Jerome Powell has stated the central bank will wait for greater clarity before adjusting interest rates, highlighting the dilemma of balancing rising inflation with efforts to sustain employment.