The Federal Reserve (FED) officials: do not want to be complacent about the price rise driven by tariffs.

Kansas City Fed President Schmid on Thursday expressed concern that tariffs could re-trigger inflation, saying that upward pressure may be felt in the coming months, but its full impact may not be fully felt for a longer period of time. The speech suggests that Schmid may be inclined to keep the Fed’s policy rate unchanged, not only at the upcoming June 17-18 meeting, but also for some time after that, to ensure that inflation, which is currently close to the Fed’s 2% target, does not get out of control. The Fed is now widely expected to hold its ground at its June meeting. “While monetary policy should theoretically ignore one-time price increases, I am reluctant to bet on the correctness of the theory with the reputation and credibility of the Fed,” Schmid said. At the same time, he said he was “optimistic” about the momentum of economic growth, despite the widespread belief that tariffs would slow economic growth and weaken the labor market.