[Marsymars]

Right, I’m just saying that raising interest rates in response to that doesn’t make any sense. It would be functionally equivalent to raising interest rates as a response to an increase in the income tax rate in order to restore the buying power of your pre-tax-increase income.

[sorcerer-mar]

Powell seems to disagree: https://archive.ph/hbwTZ

[Marsymars]

Link seems broken? From what I’ve seen of what Powell has said, it seems to track with my post, e.g. “Our obligation is to keep longer-term inflation expectations well anchored to make certain that a one-time increase in the price level does not become an ongoing inflation problem,”

i.e. It’s not the price increases directly caused by a tariff or sales tax that they’re trying to prevent, it’s any knock-off effect in price expectations that causes additional inflation.