Fed Rate Cuts Might Not Come Anytime Soon, Two Top Officials Say; China Hits Back Against U.S. Tariffs

Fed Rate Cuts Might Not Come Anytime Soon, Two Top Officials Say; China Hits Back Against U.S. Tariffs By Vicky Ge Huang

Two senior Federal Reserve officials said Monday that they are in no rush to cut interest rates further given the uncertainty surrounding the U.S. economic outlook and the White House's new policies, including tariffs.

"In my view ... it's really appropriate for policy to be patient, careful and there's no urgency for making additional adjustments, especially given all of the uncertainty," said Boston Fed President Susan Collins in an interview with CNBC.

Atlanta Fed President Raphael Bostic echoed Collins's sentiments in a moderating discussion at the Rotary Club of Atlanta. Noting that the Fed cut interest rates by 100 basis points over three meetings starting last September, Bostic said he wanted to see what this easing "translates to in terms of the economy."

"Depending on what the data are, it might mean we are waiting for awhile, " Bostic said.

The import tariffs announced by President Trump this weekend would likely cause a short-term boost in inflation, Collins noted. She said the tariffs were "broad-based," or placed on such a wide range of goods that there would be increases in "final" goods prices, as well as on intermediate goods used in earlier stages of production.

The Boston Fed president, a voting member of the Fed's interest-rate committee this year, said it was hard to assess the impact of the tariffs and how the Fed might respond. If inflation expectations were steady, one would expect the Fed would try to "look through" the short-term increase in the price level, she said.

Bostic said the Fed was just going to wait and watch. "This is an evolving story," he said.

Top News China Retaliates With New Levies, Antitrust Probe Into Google

China hit back at fresh U.S. tariffs by imposing its own levies on U.S. goods and opening a probe into Google, sparking fears of a bigger trade war.

Beijing authorities also added several metals to an export control list, a move that highlights the vulnerability of global supply chains to materials from China.

The series of actions came days after President Trump said he would impose an additional 10% tariff on Chinese goods entering the U.S. Trump said he was responding to what he described as China's failure to prevent illegal fentanyl from entering America.

The new custom duties on Chinese goods took effect Tuesday. Trump had earlier called off separate tariffs on Canadian and Mexican goods.

China Has Gotten Off Lightly on Tariffs-for Now Asia Markets Jittery as Traders Gauge First Trade War Salvos U.S. Economy Trump Pauses Tariffs on Mexico, Canada for a Month

President Trump and the leaders of Mexico and Canada reached a deal to put tariffs on hold for a month , following separate telephone calls in which the U.S. neighbors agreed to take measures to fight fentanyl trafficking across the U.S. border.

Inside the Chaotic Run-Up to Trump's Tariff U-Turn Markets Bet Trump's Tariffs Are Art of the (Temporary) Deal

As you were. President Trump's on-again, off-again tariffs briefly hit the market on Monday, before fear evaporated. What it shows: Investors are convinced he will use tariffs to extract concessions on other issues , rather than, as he keeps saying, to raise money and force companies to relocate to America.

Are Markets Underestimating the Tariff Problem? ISM Calls Trump Tariffs A Threat To Manufacturing Recovery

U.S. manufacturers were hoping to exit a two-year slump in 2025 under what they thought was going to be a business-friendly White House. But that was before Trump announced large tariffs on Canada, Mexico and China. (MarketWatch)

Tariffs Give U.S. Steelmakers a Green Light to Lift Prices Financial Regulation Trump Signs Order to Create U.S. Sovereign-Wealth Fund

President Trump on Monday signed an executive order to create a U.S. sovereign-wealth fund and suggested the fund could be used in unlocking a deal to keep TikTok operating.

Bessent at Helm of Consumer Finance Watchdog, Orders Halt to Work

Treasury Secretary Scott Bessent is ordering a freeze to work at the Consumer Financial Protection Bureau, after being named its acting director by President Trump.

Forward Guidance Tuesday (all times ET)

11 a.m.: Federal Reserve Bank of Atlanta President Raphael Bostic speaks at National Housing Crisis Task Force Meeting

2 p.m.: Federal Reserve Bank of San Francisco President Mary Daly speaks at Walter E. Hoadley Annual Economic Forecast

7:30 p.m.: Federal Reserve Vice Chair Philip Jefferson speaks at the Lafayette College Economics Department Special Lecture

Wednesday

8:15 a.m.: ADP National Employment Report

8:30 a.m.: U.S. International Trade in Goods & Services

9:45 a.m.: U.S. Services PMI

10 a.m.: U.S. Housing Vacancies

10 a.m.: ISM Report On Business Services PMI

7:30 p.m.: Federal Reserve Vice Chair Philip Jefferson speaks at Swarthmore College

Research Tariffs Could Pose a Lasting Inflationary Pressure, Hinder Rate Cuts

Tariffs are often seen as having a one-off impact on prices unlikely to fuel longer-term inflation, but Bannockburn's Marc Chandler isn't so sure. He is bracing for new tariffs to be imposed frequently, making them a lasting inflationary pressure. That, in turn, could make it harder for the Fed to cut interest rates. Although markets are still mostly pricing a Fed rate cut in June, odds of another trim later this year are declining, according to CME data. In the longer run, economic growth could suffer. - Paulo Trevisani

Basis Points European leaders, bracing for a fight with President Trump over the world's most valuable trading relationship, said they are ready to strike back but prefer cooperation. European officials need to manage their expectations in diplomatic negotiations against a more volatile geopolitical environment, European Commission President Ursula von der Leyen said in reference to a possible trade war between the bloc and the U.S. (Dow Jones Newswires) India's budget delivered on several items markets had been hoping for: a lowered deficit target, tax cuts, and support for the country's factories and the middle class. Focus now turns to policy execution . Oil prices jumped on fears that U.S. President Trump's hefty tariffs on major trade partners could disrupt supplies and raise prices at the pump. About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to [[e-mail]].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

02-04-25 0715ET