The lingering effects of tariffs, along with the conflict with Iran, have led most Federal Open Market Committee members to believe that reaching its 2% inflation target could take longer than anticipated, according to minutes from the FOMC’s March meeting released today.
The minutes show that while most FOMC participants believe the inflationary effects of tariffs would diminish this year, the timing and pace at which those effects would fade have become increasingly uncertain. They also noted that higher oil prices resulting from the Middle East conflict would exert upward pressure on inflation.
“Partly as a result of these factors, the vast majority of participants noted that progress toward the committee’s 2% objective could be slower than previously expected and judged that the risk of inflation running persistently above the committee’s objective had increased,” according to the minutes.
