NEPC’s Jennifer Appel was recently quoted in Barron’s, offering her insights on how inflation pressures and tariff policies could shape the Federal Reserve’s interest rate decisions. View excerpts below or visit Barron’s to read the full article here.
The Federal Reserve has spent the past three years proving it can bring inflation down through tighter monetary policy. But President Donald Trump’s sweeping Liberation Day tariffs could spark a new kind of inflation that the Fed is less equipped to handle.
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If inflation persists and expectations start to drift, the Fed may be forced to act anyway, tightening policy not because of confidence in its ability to bring prices down, but because failing to act would do more damage to its credibility.
But that decision won’t be easy. “Tariffs have brought about so much uncertainty on both ends of the Fed’s dual mandate,” says Jennifer Appel, principal and senior investment director at NEPC, an investment consulting firm. “If we start to see those job losses come through, there is a risk the Fed will already be behind the curve.”