Fed sees tariffs bringing upside risks to inflation, minutes show

Minutes from the last Federal Reserve meeting read, “Participants observed that available data pointed to an economy that continued to grow at a solid pace and labor market conditions that remained broadly balanced, but that inflation stayed somewhat elevated. Participants generally noted the high degree of uncertainty facing the economy. Information from participants’ business contacts and from many surveys indicated some deterioration in household and business sentiment amid heightened uncertainty about government policies. Various participants commented that high uncertainty had the potential to damp consumer spending as well as business hiring and investment activities or that inflation was likely to be boosted by increased tariffs. As a result, participants generally saw increased downside risks to employment and economic growth and upside risks to inflation while indicating that high uncertainty surrounded their economic outlooks.