The current tariff situation could complicate decisions on interest rates

The Federal Reserve will meet next week, and there could be an announcement on interest rates.

They are a big topic heading into planting season, but frequent Market Day Report guest and Senior Market Analyst with Barchart, Darin Newsom, says tariffs could keep rates higher for longer.

“I mean, it just happens. We saw it before when we started getting into trade wars and putting tariffs on all of our trade partners. Inflation is sparked, and then that’s what happens, and then when you tell the Fed that they’re not allowed to raise interest rates to combat inflation, which is what happened last time, then inflation tends to get out of hand. So, you know, if the Fed is going to sit back here and watch all these trade problems go on and they’re going to see, okay, this is going to light the fire under inflation again, they’re not going to be in any hurry to lower rates, they’re not going to be forced to lower rates.”

The FOMC meeting begins next Tuesday, with a rate announcement happening on Wednesday. A summary of economic projects will also be released.

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