On May 27, Minneapolis Fed President Kashkari reiterated the need for caution amid uncertainties from trade conflicts and pointed out that defending inflation expectations is "crucial." On Tuesday, he stated at an event held by the Bank of Japan in Tokyo that there is a "beneficial debate" among policymakers—whether to view the inflation impact of U.S. President Trump's tariffs as a temporary shock or as a long-term condition. Kashkari noted in his speech that tariff negotiations could take months or years to fully resolve, that the taxation of intermediate goods requires time to transmit, and that the risk of inflation expectations becoming unanchored may increase over time. He stated, "I will prioritize defending long-term inflation expectations." The Fed has kept interest rates unchanged in all three meetings this year so far and is expected to do the same at the next meeting in June. Prior to this, the Fed cut interest rates by one percentage point in the last three months of last year. Economists widely expect tariffs to lead to inflation, but the extent of it depends on the size of the tariffs and the degree of retaliation from other countries. Tariffs could dampen economic growth and lead to layoffs, which could result in so-called "stagflation," putting the Fed in a dilemma: whether to maintain high interest rates to curb inflation or cut rates to support a sluggish economy.