The Stubbornness of Inflation is Highlighted; The Fed's Interest Rate Hike Cycle May Be Extended

On March 27, the Financial Associated Press reported that Federal Reserve official Musalem pointed out that the current inflation rate continues to be above the 2% policy target, with further upward risks. Until there is sufficient evidence that inflation is returning to target levels, maintaining the current monetary policy stance is a prudent choice. The official specifically warned that price fluctuations caused by tariff policies may not be short-term, and the secondary transmission effects they generate could create sustained inflationary pressure. If the job market continues to show strong growth, combined with the lagging effects of tariff policies, the federal funds rate may extend its high operating cycle, and more tightening policy tools may be employed.