Minneapolis Federal Reserve Bank Chairman Kashkari said on Sunday that if global trading partners retaliate, President elect Trump's tariff proposal could exacerbate long-term inflation.

Kashkari stated that a one-time tariff "will not have a long-term impact on inflation". The challenge lies in the fact that if a tit for tat situation arises and a country responds by imposing tariffs, it will escalate. This is what is even more worrying, and to be frank, even more uncertain

During his first term, Trump imposed a series of import taxes on goods from major Asian countries, triggering a trade war and prompting retaliation from the country against the United States for imposing a series of tariffs.

One of Trump's main economic proposals during his second term was to impose universal tariffs on all imported products from all countries.

Economists, Wall Street analysts, and industry leaders have repeatedly expressed concerns about the inflationary impact of this tough trade approach, especially as inflation is just beginning to fall from its peak during the pandemic.

Kashkari said, "We have made great progress in reducing inflation. What I mean is, I don't want to declare victory yet. We need to get this job done, but we are now on a good path

Last week, the Federal Reserve cut interest rates for the second consecutive time, continuing efforts to relax monetary policy as inflation approaches its target level of 2%. Kashkari said he expects another rate cut in December, but it will depend on the "data situation" at the time.

As for Trump's other major policy proposals, such as the comprehensive deportation of immigrants plan, Kashkari pointed out that the threat of inflation is still unclear, so the Federal Reserve still adopts a "wait-and-see" attitude before adjusting policies.

Trump and his supporters, such as billionaire Elon Musk, have also bluntly stated that they want the president to provide input on the Federal Reserve's policy decisions. The Federal Reserve regards its political independence as a core feature, allowing it to formulate monetary policy solely based on the health of the US economy rather than election motives.

But Kashkari said he is not concerned about political factors affecting the Fed's decisions.

He said, "I am confident that we will continue to focus on our economic employment. This should be what we are doing and what we are doing.