00:00 Speaker A

Federal Reserve Governor Adriana Kugler is doubling down on her support for keeping interest rates steady for now. Yahoo Finance's Jennifer Schonberger joins us now with more on today's Fed speak. Rounded it up for us, Jen.

00:13 Jennifer Schonberger

Hey, Julie. Getting a lot of Fed speak today with members of the Fed warning that the risk of higher inflation from tariffs is more of a focus now than a weakening job market. Fed Governor Adriana Kugler warned today she sees the risk of higher inflation from tariffs and supports holding interest rates steady so long as inflation remains a risk.

00:41 Adriana Kugler

I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road. And this leads me to continue to support maintaining the FOMC's policy rate at this current setting if upside risks to inflation remain.

01:20 Jennifer Schonberger

Kugler said she doesn't think it's clear that one could look through tariffs and that they'll be a one-shot deal. She's eyeing inflation expectations that could give businesses ammunition to raise prices as well as tariffs on parts used to make final products where the price increases could prove more permanent. Referencing research from staff at the Fed, she said a 20% tariff on Chinese imports is estimated to add two tenths of a percentage point to inflation. And that since Chinese tariffs are higher than that and have increased on other countries as well, that prices are getting passed through quickly and we could see larger price increases soon. Meanwhile, Kansas City Fed president, Jeff Schmid, also said today he's very focused on the risk for higher inflation from tariffs, noting that economic theory might suggest that monetary policy should look through a one-time increase in prices, but that quote, "This is not a signal that we should let down our guard." He said the Fed balances its mandate for as the Fed balances its mandate for full employment and price stability, he intends to remain focused on the importance of, quote, maintaining credibility on inflation. Elsewhere, outgoing Philadelphia Fed president, Patrick Harker, said in his last speech before he retires at the end of this month that he too favors holding rates steady in the face of policy uncertainty. He says it's unclear whether inflation from tariffs could prove short-lived. Back to you.

03:39 Speaker A

Jen, thanks very much.