US Treasury Secretary Scott Besant stated in an interview that the latest tariff policies of the Trump administration will not lead to long-term inflation, although prices may experience temporary adjustments.

Tariffs may indeed lead to a one-time price adjustment, but this is different from persistent inflation... If any factor is temporary, it must be a one-time tariff price adjustment. "- US Treasury Secretary Scott Besant

His statement was interpreted as a criticism of the Biden administration and the Federal Reserve's inflation misjudgment in 2020. At that time, Federal Reserve officials generally believed that inflation was "temporary" and therefore failed to take aggressive interest rate hikes in a timely manner, resulting in inflation soaring to its highest level in 40 years in 2022.

In addition, Benson also refuted some economists' concerns that Trump's tariffs may push up commodity prices, thereby hindering the Federal Reserve's efforts to control inflation at its 2% target.

Besent emphasized that the purpose of this move is to adjust the international economic system, prevent the United States from bearing the economic imbalance pressure of other countries, and curb excessive dependence on cheap imported goods.

The acquisition of cheap goods is not the essence of the American Dream. The core of the American Dream is that every citizen can achieve prosperity, social mobility, and economic security. "- Scott Besant

Nevertheless, some economists remain concerned that these tariffs may exert upward pressure on the cost of imported goods, thereby affecting the Consumer Price Index (CPI) and weakening the Federal Reserve's room for interest rate cuts.

After three consecutive interest rate cuts at the end of 2024, the Federal Reserve suspended further interest rate adjustments in early 2025. The market generally expects that the Federal Reserve may cut interest rates three more times before the end of this year to address the risk of slowing US economic growth.

However, Besent believes that price adjustments caused by tariffs should not affect the Federal Reserve's monetary policy decisions.

Although I have agreed not to discuss the future policies of the Federal Reserve, I hope the team can reunite and believe that nothing is more short-lived than tariffs. "- Scott Besant

Editor's viewpoint:

In the short term, it may push up some commodity prices: even though Besant believes that the impact of tariffs is "one-time", companies may pass on higher import costs to consumers, leading to an increase in CPI.

The long-term inflation risk depends on the market transmission mechanism: if tariffs lead to supply chain adjustments and companies reduce costs through localized production, the long-term inflation risk may be limited.

The space for the Federal Reserve to cut interest rates is limited: if tariffs intensify the pressure of rising prices, the Federal Reserve may have to reassess its pace of interest rate cuts, thereby affecting market liquidity.