American consumers could see price hikes if former President Donald Trump moves forward with proposed tariffs, the Federal Reserve warned in minutes from its January meeting. The minutes noted concerns that tariffs might hinder the disinflation process, with businesses likely passing increased costs to consumers. The Fed also highlighted uncertainty surrounding trade, immigration, and regulatory policies, making it difficult to assess inflation trends. The central bank left interest rates unchanged and signaled caution about future cuts, with analysts expecting at most one cut in 2025. Trump's push for lower interest rates has raised concerns about whether he will uphold the Federal Reserve's independence.
