Fear of a tariff ‘Trumpcession’ puts pressure on Bank and Fed over interest rates

A trade war could push up inflation when both the UK and US economies really need cheaper borrowing. So what’s a central bank to do?

Monetary policymakers on both sides of the Atlantic will be considering how seriously to take Donald Trump’s threats of an all-out trade war as they give their verdict on the path of interest rates this week.

The Federal Reserve, the US central bank, will examine the prospect of a “Trumpcession” brought on by tariffs that send import costs rocketing and convince consumers, already shellshocked from the cost of living crisis, to stop spending.

Topics

U.S. tariffs could thrust Germany into recession, central bank governor says

Ongoing U.S. tariffs could push Europe's largest economy into a recession, German central bank President Joachim Nagel warned.
CNBC - 4d
India's inflation rate dips to cooler-than-expected 3.61% in February, below central bank's target

The lower inflation reading could give the Reserve Bank of India room to cut rates and support its slowing economy.
CNBC - 5d
Federal Reserve is likely to hold interest rates steady next week. But some consumer loans are getting cheaper

High interest rates have put pressure on households, but some borrowing costs are starting to ease, even with the Fed on the sidelines.
CNBC - 3d
US tariffs could extend Germany's recession, says bank

Germany's central bank president says US tariffs and retaliation to them could tip Europe's largest economy into recession again.
BBC News - 4d
Lagarde says ‘impossible’ for ECB to always guarantee 2% inflation

Potential price pressure from trade war and debt-fuelled borrowing add to uncertainty, warns central bank president
Financial Times - 5d
Inflation and interest rates tracker: see how your country compares

Inflationary pressures are beginning to wane but not all central banks have taken action yet. See how this affects you
Financial Times - 5d
Trump’s tariff volatility complicates Fed’s rate messaging

US central bank risks relying too much on backward-looking data, economists warn
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What are tariffs and why is Trump using them?

Tariffs are a central part of Trump's political vision, but economists fear they could spark a trade war.
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Inflation and Gas Prices Just Hit 4-Year Lows. The Fed Won’t Care

Policymakers won’t cut interest rates in March, but pressure is mounting.
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