Wells Fargo: The Federal Reserve may not prioritize the inflation caused by Trump's tariff policy and could cut interest rates three more times this year

ChainCatcher news, according to Jin Shi reports, the Trump administration's radical tariff policy may lead to further inflation, but economic models indicate that this will be a one-time increase in price levels rather than a long-term inflationary spiral.

Wells Fargo economist Jay Bryson said this might persuade the Federal Reserve to be more patient in addressing inflation caused by tariffs, especially in the context of a continuing slowdown in the labor market. His view supports Wells Fargo's baseline expectation that the Federal Reserve will cut interest rates three more times this year, each by 25 basis points.

However, Bryson warned that if the trade war becomes more protracted, such as through a series of tit-for-tat international reprisals, the Federal Reserve may have to take the inflationary consequences more seriously.