Federal Reserve Watch for June 26: Tariff Inflation Impacts Could be Temporary, More Clarity Needed

02:50 PM EDT, 06/26/2025 (MT Newswires) -- Richmond Fed President Tom Barkin (nonvoter) said that he expects upward pressure on prices due to tariffs but said that monetary policy is well positioned to deal with the impact.

Fed Governor Michael Barr (voter) repeated that there is uncertainty about tariff effects but noted that monetary policy is "well positioned" to allow the Federal Open Market Committee time to see how those effects unfold.

Chicago Fed President Austan Goolsbee (voter) said that the Fed needs 'a few months of clarity' on the impact of tariffs before it can be certain that the effects will be transitory.

San Francisco Fed President Mary Daly (nonvoter) said that the FOMC could cut rates in the fall if the inflation impact of tariffs proves to be modest and temporary.

Recent comments of note:

(June 25) Fed Chairman Jerome Powell (voter) delivered a second day of testimony, repeating much what he said the previous day about the need for patience regarding monetary policy changes due to the uncertainty from tariffs. Powell repeated that inflation is likely to rise in the coming months due to tariffs, with consumers bearing part of increases and the first indications possibly seen in the June or July price data.

(June 24) Fed Governor Michael Barr (voter) said that the FOMC should remain patient regarding rate decisions due to the uncertainty surrounding tariff policy that could lead to higher inflation and a slower economy.

(June 24) Fed Chairman Jerome Powell (voter) said that the FOMC has time to see how the tariff effects on inflation evolve before deciding whether to lower interest rates further. Powell said that the FOMC would be willing to lower rates sooner rather than later if inflation proves to be contained but added that the impact of tariffs is likely to be seen in the June and July inflation data.

(June 24) New York Fed President John Williams (voter) said that it is appropriate for the FOMC to maintain a modestly restrictive stance to allow time to navigate the uncertainty presented by tariffs and reduced immigration. Williams expects slower GDP growth, faster inflation growth and rising unemployment this year.

(June 24) Atlanta Fed President Raphael Bostic (nonvoter) said in an exclusive interview with Reuters that due to a strong labor market, the FOMC has time to see how tariffs impact inflation before making changes to monetary policy, adding that he sees only one more rate cut later in the year.

(June 23) Fed Vice Chair for Supervision Michelle Bowman (voter) said that a July rate cut could be considered given an expected slowing in labor market data and the possibility that the inflation impact from tariffs could be a one-time event and of a smaller size than previously expected.

(June 23) Chicago Fed President Austan Goolsbee (voter) said tariff impacts to this point have been more modest than expected. He added that uncertainty remains, but if inflation does not get lifted by the tariffs, then further rate reductions can be considered.

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