Wells Fargo: Fed may not take inflation caused by Trump's tariff policy too seriously

the Trump administration's aggressive tariff policy may lead to further inflation, but economic models show that this will be a one-time price increase rather than a long-term inflation spiral. Jay Bryson, an economist at Wells Fargo, said this could convince the Federal Reserve to be more patient in dealing with the inflation caused by tariffs, especially as the labor market continues to slow. His view supports Wells Fargo's benchmark expectation that the Fed will cut interest rates three more times this year, each time by 25 basis points. However, Bryson warned that if the trade war becomes more protracted, such as a series of tit-for-tat international retaliations, the Fed may have to take the consequences of inflation more seriously.