Federal Reserve member: I do not expect a lasting impact of tariffs on inflation.

During his speech on Wednesday, Federal Open Market Committee member Christopher Waller stated that he would support further interest rate cuts by the U.S. Federal Reserve in 2025, but he added that the pace of rate cuts would depend on the progress of inflation data.

Waller's main statements today included:

• Inflation will continue to make progress toward the 2% target.
• Core effects will improve inflation in 2025.
• Recent monthly and short-term data indicate an upcoming improvement in U.S. inflation data.
• Although recent progress in inflation data has been slow, much of this is attributed to housing prices and non-market services, which are less reliable indicators of core price pressures.
• I do not expect the tariffs that the new U.S. administration will impose to cause persistent inflation, and therefore, they are unlikely to affect views on appropriate monetary policy.
• However, geopolitical conflicts and tariffs may be a source of renewed price pressures.
• The U.S. economy generally proves to have solid fundamentals, and nothing indicates that the labor market will significantly weaken in the coming months.
• Central bank governors face a wide range of challenges in the future, ranging from demographic aging to geopolitical conflicts and globalization-related challenges.