Fed’s Kashkari Warns Tariffs Could Trigger Stagflation

Minneapolis Fed President Neel Kashkari sounded the alarm on Monday, cautioning that President Trump's trade tariffs risk driving a stagflationary environment—where slowing growth and rising prices converge.

Tariff-Driven Supply Shocks

Kashkari told Bloomberg TV that U.S. consumers have yet to fully feel the pinch of higher import duties. “There's no question that the shock of tariffs is stagflationary,” he said, noting the ultimate impact will hinge on how elevated tariffs remain and the duration of this uncertain policy backdrop.

Rate-Setting Uncertainty

With Treasury yields climbing and investors reevaluating U.S. assets, Kashkari sees little chance the Fed will adjust rates by September without clearer trade-deal outcomes. Market participants can track upcoming Fed speeches and decision dates—including Kashkari's next remarks—via the Economics Calendar API, ensuring you stay ahead of potential shifts in monetary policy guidance.

Balancing Act Ahead

While prolonged tariffs could entrench higher inflation, Kashkari acknowledged that a swift resolution or shorter-lived levies would temper stagflationary pressures. As the Fed navigates these supply-side shocks alongside labor-market dynamics, clear policy signals will be crucial to managing both price stability and growth prospects.