According to BlockBeats, on May 27, Minneapolis Fed President Kashkari emphasized the importance of defending inflation expectations at a Bank of Japan event in Tokyo. He pointed out that the impact of Trump's tariffs could be temporary or long-term.
Kashkari stated that tariff negotiations may take months or years to conclude, and that taxing intermediate goods requires time to transmit, which may increase the risk of inflation expectations becoming unanchored. He prioritized defending long-term inflation expectations.
The Federal Reserve has kept interest rates unchanged at three meetings this year, and it is expected to do so at the June meeting as well. Tariffs could lead to stagflation, putting the Fed in a dilemma between maintaining high interest rates or cutting them.