American inflation under pressure? Fed sees risks, the white house remains optimistic

The US Central Bank, the Federal Reserve (FED), holds its breath. While the White House maintains that the new import duties have “hardly any effect” on inflation, the Fed sounds a different sound. Policy makers are, on the other hand, ensuring that the increased rates can greatly stimulate inflation in the US in the coming period, reports Reuters news agency.

Consumer will feel price increase

According to Raphael Bostic, chairman of one of the twelve regional banks, the Atlanta Fed, many companies have now played their last assets to postpone price increases. Think of tricks such as installing extra stocks or purchasing products in advance.

“But those strategies are almost worked out,” says Bostic. The time that these stocks run out is close by for many companies, and then they have to switch to the more expensive options. Bostic says: “We are now about to change prices, and then it becomes interesting to see how consumers respond to that.”

That is why FED officials will keep their foot on the foot for the time being. Beth Hammack, president of the Cleveland Fed, one of the other regional branches of the Central Bank, emphasizes that it is now mainly about good observation and listening. “For the time being it is smarter to keep our hands on their back,” she says. “We first have to take a good look at the data and really listen to what is going on in society. Only then is it time for action.”

White House contradicts

Remarkably, the White House sees the situation very differently. Stephen Miran, head of the Council of Economic Advisers, dismisses the worries. According to him, the previously imported import duties have hardly influenced inflation. “We have been introducing rates since the start of this government,” he said in an interview with Bloomberg. “And yet we don’t see any serious price pressure.”

But whether Miran is right with that is just the question. The heaviest rates towards China, including a levy of no less than 145% by the US and a counter -reaction of 125% by China, have only been in force since 9 and 12 April. So those measures were only introduced a month ago. The real effect on consumer prices probably still has to show itself.