Fed’s Waller Warns Successive Tariffs Could Trigger Rolling Inflation Effect

Federal Reserve Governor Christopher Waller said the latest round of U.S. tariffs amounts to a tax that will be shared across producers, importers and consumers, with some of the costs likely to flow through to retail prices. While he does not expect the levies to generate persistent inflation, Waller cautioned that a “constant sequence of tariffs could cause a rolling impact,” and he plans to monitor three- and six-month inflation data to gauge any pass-through. He added that longer-term inflation expectations remain anchored but warned they could rise if the Fed’s credibility slips. Waller’s remarks echo comments made in late June by Chicago Fed President Austan Goolsbee, who said he was encouraged by recent inflation readings yet wants several months of additional data—particularly after a July 9 tariff deadline—before drawing firm conclusions. Goolsbee expressed hope that the duties will have only a modest effect on prices but underlined the need for caution as the central bank formulates policy. The officials’ comments come three months after Washington imposed a 145% tariff on a broad swath of Chinese imports. Policymakers are assessing how the trade measures will filter through the economy as they weigh the timing of any adjustments to interest rates.