St Louis Fed President Alberto Musalem spoke to the press on the weekend and was asked about the impact of tariffs on inflation.
He said that it was 50/50 on whether it would cause sustained inflation or inflation for a quarter or two. Critically, he also said there would be ongoing uncertainty around tariffs “right through the summer”. In a best-case scenario he said that the uncertainty goes away in July and they’re in a position to cut in September.
The market is pricing in an 86% chance of a cut in September.
This article was written by Adam Button at www.forexlive.com.
