Wells Fargo: The Fed may not take the inflation caused by Trump's tariff policy seriously and may cut interest rates three more times this year

The Trump administration's aggressive tariff policy could lead to further inflation, but economic models show it will be a one-time increase in price levels rather than a long-term inflationary spiral. Wells Fargo economist Jay Bryson said this could convince the Federal Reserve to be more patient in dealing with tariff-induced inflation, especially as the labor market continues to slow. His view supports Wells Fargo's baseline expectation that the Fed will cut interest rates three more times this year, by 25 basis points each time. But Bryson warned that if the trade war becomes more protracted, such as a series of tit-for-tat international retaliation, the Fed may have to take the inflationary consequences more seriously. (Jinshi)