Fed officials sound alarm, low worrying inflation could last

"The Federal Reserve could take this opportunity to signal that a slight overshoot of inflation is consistent with our objectives and to align the policy with this statement," she said.

Trump's tariffs, which rose to 25 percent on Chinese goods worth $ 200 billion last week and could impose additional imports of $ 300 billion, could push prices up. consumption in the United States. On Thursday, Walmart, one of the country's largest retailers, said Trump's rates would raise consumer prices.

On Wednesday, John Williams, chairman of the Federal Reserve of New York and vice chairman of the Federal Open Market Committee, also expressed concern over inflation, saying in a speech in Zurich that global policy makers monetary policy could not raise prices. Price increases have been consistently low in Japan and the European Union, among other advanced economies.

"Investors see this low inflation as an aberration, but rather as a new normal," Williams said. He argued that central banks should reorganize their policy approaches to deal with a reality of low rates and low price gains. "In the absence of such changes, central banks will be seriously challenged to achieve stable economies and well-anchored inflation expectations."

Businesses, consumers and investors in the United States have all lowered their inflation outlook. Market-based expectations indicators have fallen sharply and two recent Fed surveys show forecasters, both households and professionals, are seeing lower inflation over the next few years.

Given the precarious situation, the Fed conducts an annual review of its own strategies. Mr. Powell described this process as a process likely to lead to an evolution rather than a revolution, while other officials expressed more optimism about the fact that it might result in a substantial change in the way the Fed approaches monetary policy.

Areas to consider include how the Fed targets inflation. At present, the Fed is aiming for a symmetrical inflation goal of 2%, which means it's still trying to achieve exactly that rate. For example, it could reach 2% on average, which means that it would now compensate for low inflation with higher inflation.