Federal Reserve's Kashkari: Tariff negotiations may take months or years, supports staying put

BlockBeats News: On May 27th, Minneapolis Federal Reserve Chairman Kashkari once again emphasized the need to remain cautious in the face of trade conflict uncertainty and pointed out that defending inflation expectations is "crucial". On Tuesday, he stated at a Bank of Japan event in Tokyo that there is a "beneficial debate" among policy makers - whether to view the impact of US President Trump's tariff inflation as a temporary shock or a long-term situation. Kashkari pointed out in his speech that tariff negotiations may take months or years to fully conclude, tariffs on intermediate products may take time to be transmitted, and the risk of inflation expectations becoming unanchored may increase over time. He said, "I will prioritize defending long-term inflation expectations The Federal Reserve has kept interest rates unchanged at its three meetings so far this year and is expected to do the same at its next meeting in June. Prior to this, the Federal Reserve cut interest rates by one percentage point in the last three months of last year. Economists generally predict that tariffs will lead to inflation, but their prevalence depends on the size of the tariffs and the degree of retaliation from other countries. Tariffs may drag down economic growth and lead to layoffs, which could result in so-called 'stagflation' and put the Federal Reserve in a dilemma: whether to maintain high interest rates to curb inflation or cut interest rates to support a sluggish economy. (Golden Ten)