Fed's Balkin: Tariffs could reduce jobs and push up inflation

Trump's tariffs could push up inflation and unemployment, posing a big challenge for the Federal Reserve, according to Richmond Fed President Barkin. Price shocks from tariffs could trigger a ‘cage match’ between frustrated consumers and providers of goods and services who ‘genuinely believe’ they must pass on costs. Obviously, some of the impact of tariffs will be transmitted to prices, thus fuelling inflation. Balkin also warned that the job market will also feel some of the impact. Higher prices could lower demand and reduce sales. If companies don't raise prices, their profit margins will fall; if they have to start operating more efficiently, that means adding staff.