Fed's Musalem says could be end of year before clarity on tariff impact on inflation
WASHINGTON, July 10 (Reuters) - It could be the end of this year or early into 2026 before it is clear how much impact rising import tariffs will have on inflation, St. Louis Fed president Alberto Musalem said on Thursday, sketching out one of the reasons Fed policymakers are taking a wait-and-see approach to cutting interest rates.
"Tariffs could have a temporary effect on prices...They could also have a more persistent impact on inflation...I believe it is too soon to tell just yet," Musalem said in a webcast interview with the Official Monetary and Financial Institutions Forum. Between companies stocking inventories, final tariffs still in flux, and the time it may take for taxes on intermediate goods to be felt in consumer prices, "it's early...It is possible I may be able to form a picture by October, November, December," said Musalem, a voter this year on interest rate policy.
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