Part 3/7:
This nuanced understanding of economic variables was echoed by Alberto Mussallem, president of the St. Louis Fed, who emphasized the importance of differentiating between immediate price influences and longer-term inflation effects. If the price level effects from tariffs are only temporary, a measured strategy may be warranted. However, should inflation expectations escalate, the Fed may need to reconsider its current rate policies, possibly opting to maintain or even increase rates.