How tariffs could impact the national interest rates [Video]

CHARLOTTE, N.C. — President Donald Trump’s plan for international tariffs could have impacts on national interest rates. 

The Federal Reserve is keeping a close eye on inflation as Trump considers new tariffs on Mexico and Canada. Tariffs could push up prices on imported goods, impacting both businesses and consumers.

Historically, the Fed has lowered interest rates to counteract trade war disruptions. But after years of high inflation, the central bank might take a different approach this time.

Experts, including at The Wall Street Journal, say businesses and consumers are more used to rising prices now. If tariffs push inflation higher, the Fed might keep interest rates steady longer to keep costs under control.

The key question is whether tariffs will create a temporary spike in inflation or prolonged economic pressure — shaping how the Fed reacts.