In a report published on Thursday (21), the IF (Institute of International Finance, acronym in English) states that the tariffs are “clearly” feeding inflation American, with the import prices and producers rising as the reserve stocks run out.
According to the note, also the restrictions on immigration in USA They are squeezing the supply of labor, which reduces the equilibrium point of job creation and distorts signals.
For the institute, with tariffs raising costs and restrictions on immigration by squeezing the supply of labor, the issue of Fed Monetary Policy (Federal Reserve, the Central Bank) is not about if it is time to cut interest, but when reductions can start without the Fed loses its credibility.
“The Fed is limited to cut without clearer misinflation, but facing increasing risks of inflation driven by supply,” says the text, noting that the key issue is not when inflation will fall, but if it will rise again before growth slows down firmly.
IF also evaluates that demand seems resilient, although signs of stress are emerging among low -income families.
Also according to the report, manufacturing and private construction are weakening under the weight of tariffs and more restrictive financial conditions.
