Fed Governor Waller sees tariff inflation as 'passing' in 'Tush Push' comparison

Governor of the Federal Reserve Christopher Waller said on Monday that he expects the consequences of the rates of President Donald Trump to be “transient”, a term that brought the central bank in trouble during the last inflation.

“I can already hear the howling that this should be a mistake, given what happened in 2021 and 2022. But only because it was not successful does not mean that you should never think again,” Waller said in comments for a policy speech in St. Louis who compared his inflation vision to the controversial “Tush Push” “Tush” “” “” “

Waller explained two scenarios for what the tasks will ultimately look like, said that larger and long -term rates would initially bring a larger inflation peak to a reach of 4% to 5% that ultimately the growth would delay and the unemployment increased. In the smaller scenario, inflation would touch around 3% and then fall off.

Both cases would still see the interest rates of the Fed lower, where timing is the only question, he said. Larger rates can force a reduction to support growth, while smaller tasks may be “good news” cut later this year, Waller added.

“Yes, I say that I expect increased inflation to be temporary, and” temporarily “is another word for transient,” he said. “Despite the fact that the last inflation of 2021 lasted longer than I had initially expected, my best judgment is that higher inflation of rates will be temporarily.”

The “transient” term will return to the inflation peak in 2021 that expected of officials and many economists expected after the supply chain and the demand factors related to the COVID-19 Pandemie.

However, prices continued to rise, and reached their highest since the early 1980s and which required a series of dramatic speed increases. Although inflation has been considerably withdrawn since the FED began to rise in 2022, it remains above the target of 2% of the central bank. The FED reduced its benchmark -lending percentage at the end of 2024 with a full percentage point, but was not cut further this year.

A Trump -appointed during the first term of the president, Waller used a football analogy to explain his views on “transient” inflation. He quoted the famous “Tush Push” game of the Philadelphia Eagles who used the team with a great effect on short-yardage and goal line situations.

“You are the Philadelphia Eagles and it is fourth down and a few centimeters from the goal line. You call up to the Tush -Push but can't get the ball to walk,” he said. “Because it didn't work out as you expected, this means that the next time you are confronted with a similar situation, you don't have to call? I don't think so.”

Waller estimated that Trump has one of the two goals of the rates: to keep the taxes high and to raise the economy, or to use them as negotiating tactics. In the first case he sees the growth “to a crawl” slow down, while the unemployment rate “significantly” increases. If the rates are negotiated, he sees the effect on inflation “considerably smaller”.

In the other case, he said: “One of the biggest shocks to influence the American economy in many decades” makes predictions and policy -making difficult. FED officials must “remain flexible” in determining the future path.

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