Boston, MA – Susan Collins, President of the Federal Reserve Bank of Boston. She thinks that the impact of the tariffs could drive core inflation well above 3% this year. Her comments highlight the turmoil caused by the economic rollercoaster that has resulted from the erratic tariff regime established under the former Trump administration.
Collins emphasized that the Federal Reserve stands prepared to help ease inflationary pressures. Uncertainty around the volatility of tariff regulations remains problematic. She noted that the Fed could have opportunities to cut rates in the fall. Whether it moves in the affirmative will be up to how the economic indicators develop.
Collins’s comments come as the Forex market continues to respond in real-time to rapidly shifting economic indicators. Collectively, these signals include the importance of tariffs’ bottom-line consumer price effects. The Fed’s policy decisions have deep ties to these events. Collins emphasized the need to ensure that we walk through this new and complicated landscape very carefully.
Neither the author of this article nor FXStreet, the publisher of this article, is registered investment advisor. Smart readers will remember that this is not investment advice. 81.4% of retail investor accounts lose money trading contracts for difference (CFDs) with this provider. This is to remind you about the high risks that trading CFDs carries. This should serve as a cautionary tale of the very real dangers when trading in volatile markets.
This unpredictability with tariffs has been an all-encompassing strain of the Trump administration’s economic strategy. Confounding administration U-turns on the most basic trade policies have left investors and economists high and dry. Collins cautions that inflation may become more prevalent. He fears that if these tariffs are not reversed core inflation rates can push significantly higher than acceptable levels.
As the Fed continues to monitor inflation and employment data, it remains committed to fulfilling its dual mandate of promoting maximum employment and maintaining stable prices. An external factor like tariffs makes this mission difficult. The potential positive effect on the Fed’s ability to lower rates would largely rest on the economic growth and inflation effects of these tariffs.
The Forex market, especially in actively traded pairs such as EUR/USD, continues to react sharply to these news flows. Investors are narrowly focused on policymakers’ reactions to the continued tariff talks and their possible economic consequences. The best brokers for trading EUR/USD in 2025 will be determined by the Fed’s most important decisions. In this endeavor, the administration’s decisions will be just as important.