Federal Reserve Governor Barr warns that further rate cuts should be approached with caution, stating that tariffs may keep inflation elevated

Federal Reserve Board Governor Barr stated that the Federal Reserve should exercise caution when considering further interest rate cuts to observe economic data and assess the balance of risks related to inflation and the labor market. He warned that the new tariffs from the Trump administration could drive up prices, making it more difficult for inflation to decline. Barr predicted that the core personal consumption expenditures price index of the Federal Reserve would rise above 3% by the end of the year, and overall inflation might not return to the 2% target level until the end of 2027. He emphasized that a softening labor market could help alleviate price pressures, but the economy may face further pressure in the coming months