Tariffs Likely to Raise Prices, Says Fed’s Schmid

Kansas City Fed Bank President Jeff Schmid believes that the Trump administration’s tariffs will result in price increases in the coming months as trade barriers rise.

“While the tariffs are likely to push up prices, the extent of the increase is not certain, and likely will not be fully apparent for some time,” said Schmid in prepared remarks for a Kansas City banking conference on Thursday.

Schmid’s opinion echoes other Fed members’ comments concerning economic uncertainty in regard to inflation and employment, likely fueling a decision to keep rates unchanged at the next Federal Open Market Committee (FOMC) meeting.

FOMC to Decide Interest Rate on July 18

The next FOMC meeting is scheduled for June 17 and 18, with the rate decision to be released on June 18. Traders are currently pricing in a 97.4% chance that the FOMC will vote to keep the federal funds rate steady between 4.25% and 4.50% compared to 72.4% a month ago, according to the CME FedWatch tool.

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