Fed: 'Still early' to assess effect of tariffs

​​​​​​​By Gokhan Ergocun

ISTANBUL (AA) - The Fed reported Friday that the effect of tariff increases on consumer prices in the US is highly uncertain, as trade policy developments continue and it is still too early to assess how consumers and businesses will respond.

The June edition of the Monetary Policy Report, stated that inflation has continued to slow in 2025 but remains somewhat elevated.

The report noted that the labor market is strong, employment growth has been moderate this year, and the unemployment rate is low.

The Fed's report stressed that indicators of household and business confidence have declined this year due to concerns about the effects of high tariffs on inflation and employment, as well as increasing uncertainty about the economic outlook.

It said as trade policy continues to evolve and it is still early to assess how consumers and firms will respond, the effects of tariff increases on US consumer prices are highly uncertain.

The report noted that the effects of tariffs cannot be directly observed in official data, but the trend in net price changes across goods categories this year suggests that tariffs may have contributed to the recent rise in goods inflation.