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Federal Reserve officials have warned that the signs that investors in the American bond market are bread in the highest inflation will be the “main red flag” that could increase policy makers’ plans to reduce interest rates.

Notes from East GolsbyChairman of the Federal Reserve at Chicago and a voting member at the Federal Open Market Committee, more than a week after he closely monitored him Michigan University poll Long -term inflation expectations showed the highest level since 1993.

“If you start seeing the long -term inflation expectations, starting to behave the way these investigative studies in the past two months, I see it as part of the main anxiety of red science,” Golsby told the Financial Times.

the feeding Last week I paid inflation and She reduced her growth expectationsDonald Trump’s tariff all over the world in the world. However, Jay Powell, the head of the Central Bank, expressed his confidence that inflation expectations are still under examination, citing defeated expectations in the market.

The rate of price growth for a period of five-five years-a measure of market evaluation for price growth during the second half of the next decade-2.2 %. On the other hand, consumers in UMICH survey expect inflation by 3.9 percent in the long run.

“If the investor’s expectations of rapprochement with those in American families begin, the Federal Reserve will need to act:” regardless of the circumstances, you must address this, “said Golsby, who held the position of the president’s high economic advisor at that time.

Central bankers look everywhere to maintain long -term inflation expectations as “consolidating” as a decisive part of their job. If the audience no longer trusts them, this may result in a vicious circle of higher wages and increase prices.

Maintaining expectations under control now is more important than usual, as the federal reserve is struggling to re -inflation with the target of inflation by 2 percent after the American economy has suffered from prices since the 1980s, an increase in the restrictions of the supply of the epidemic.

The Personal Consumption Expenditure Index was one of the preferred measures at the Federal Reserve Bank, 2.5 percent in January.

Golsby said that the central bank was no longer on the “golden track”, which he witnessed in 2023 and 2024, when inflation was apparently reviewing to 2 percent, without decreasing growth or raising unemployment. I have now entered “a different chapter”, as “there is a lot of dust in the air.”

The Federal Reserve acknowledged the uncertainty caused by Trump about inflation and growth expectations in setting plans to reduce interest rates from the current “restricted” level of 4.25 percent to 4.5 percent.

Although officials still expect discounts on a quarter of points at some point this year, the central bank retains borrowing costs for the second meeting in a row last week.

Powell acknowledged that, partly in response to the definitions, “There may be a delay in further progress throughout this year.” Economic inflation.

Golsby said he believed that borrowing costs will be “slightly less” in 12-18 months from now, but he warned that it might take longer than expected to come to the next because of economic uncertainty.

“My view is that when there is dust in the air,” wait and see, “is the right approach when you face uncertainty.” “But” wait and see “not free – it comes at a cost. You can get the ability to learn new information, [but] Check some ability to move gradually. ”

“The three weeks to the next six will be” a critical period [when] We will solve a series of uncertainty in politics. ”

“When I speak to the executives here in the province, they are martyred on April 2 as a major point of uncertainty,” said Golsby, in reference to the so -called “Editing Day”, referring to the so -called “Tahrir Day” of Trump, when the president plans to reveal the disclosure of The “mutual” definitions We have commercial partners.

“They do not know what will happen with the customs tariff, and they do not know their size, they do not know whether there are exemptions, and how it will be applied to Car sectorEspecially because of its merging with Canada and Mexico. ”