Federal Reserve Meeting Minutes: If Tariffs Lead to Higher-Than-Expected Inflation, Maintaining a Tighter Monetary Policy Stance Would Be Appropriate

According to a report by Jinse Finance, the latest minutes from the Federal Reserve's June meeting indicate that participants noted it would be appropriate to maintain a tighter monetary policy stance if tariffs lead to higher-than-expected inflation that persists longer than anticipated, or if there is a significant rise in medium- or long-term inflation expectations, especially in the context of stable labor market conditions and economic activity. However, if labor market conditions or economic activity were to weaken substantially, or if inflation continues to decline and inflation expectations remain well-anchored, then adopting a less restrictive monetary policy stance would be appropriate. Participants also pointed out that if high inflation proves more persistent while employment prospects weaken, the committee may face difficult trade-offs.