Federal Reserve officials are expressing apprehension that President Donald Trump's proposed tariffs could exacerbate inflation, complicating the central bank's efforts to manage economic stability.

The administration's plan includes imposing a 25% tariff on imports from Mexico and Canada, and a 10% tariff on Chinese goods. These measures are anticipated to raise the prices of both final and intermediate goods, potentially leading to higher consumer costs.

Boston Fed President Susan Collins noted that such broad-based tariffs could increase prices across various sectors. Similarly, Richmond Fed President Tom Barkin highlighted the uncertainty surrounding the tariffs' impact, emphasizing the need for careful assessment before making policy adjustments.

The Federal Reserve is currently adopting a patient approach, aiming to evaluate the evolving economic landscape before implementing further rate cuts. However, the potential inflationary effects of the proposed tariffs add complexity to the Fed's policy decisions, as they strive to balance economic growth with price stability.

The situation remains fluid, with the central bank closely monitoring developments to determine appropriate monetary responses.