#CPIWatch | Fed’s Collins: Tariffs Set to Raise Inflation, Curb Hiring

Boston Fed President Susan Collins said Tuesday that tariffs—some dating back to the Trump administration—are expected to push inflation higher and slow hiring in the months ahead. Her comments came as fresh CPI data showed inflationary pressures ticking back up, aligning with warnings from tariff critics.

Key Takeaways:

The economy remains solid, giving the Fed breathing room before deciding on its next rate move.

Policy-setting is especially tough amid current economic uncertainties.

Collins calls for the Fed to be “actively patient” with its approach to interest rates.

Tariffs are projected to lift inflation in H2 2025, with core inflation potentially hovering around 3% by year-end.

Hiring may slow due to tariffs, though likely not sharply.

Healthy household and business balance sheets could cushion the impact.

Strong corporate profit margins may reduce how much tariff costs get passed to consumers.

Tariffs are expected to temporarily weigh on an otherwise strong economy.

Core goods inflation already shows early signs of tariff-related effects.

Stay tuned — the inflation battle isn’t over yet.