Will tariffs cause sustained or short-lived inflation? | Forexlive

St Louis Fed President Alberto Musalem spoke to the press on the weekend and was asked about the impact of tariffs on inflation.

He said that it was 50/50 on whether it would cause sustained inflation or inflation for a quarter or two. Critically, he also said there would be ongoing uncertainty around tariffs “right through the summer”. In a best-case scenario he said that the uncertainty goes away in July and they’re in a position to cut in September.

The market is pricing in an 86% chance of a cut in September.