Will tariffs cause sustained or short-lived inflation?

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.

This article was written by Adam Button at www.forexlive.com.