Huitong Finance APP News - Minneapolis Federal Reserve Bank President Kashkari said on Sunday that if global trading partners retaliate, President-elect Trump's tariff proposal may exacerbate long-term inflation.

Kashkari said the one-time tariffs 'will not have a long-term impact on inflation'. 'The challenge is that if there is a situation of tit-for-tat, where one country imposes tariffs in response, it will escalate. That's the more worrisome part, frankly, and also more uncertain.'

During his first term, Trump imposed a series of import taxes on major Asian countries, triggering a trade war, which led to retaliatory tariffs on the United States by these countries.

One of Trump's major economic proposals for his second term is to impose universal tariffs on all imported products from all countries.

Economists, Wall Street analysts, and industry leaders have repeatedly expressed concerns about the inflationary impact of this hardline trade approach, especially as inflation is just beginning to recede from its peak during the pandemic.

Kashkari said, "We have made great progress in dropping inflation, I mean, I don't want to declare victory yet. We need to finish this job, but we are now on a good path."

Last week, the Federal Reserve cut interest rates for the second time in a row, continuing to work on easing monetary policy as inflation approaches the 2% target level. Kashkari said he expects another rate cut in December, but that will depend on the "data situation" at the time.

As for Trump's other major policy proposals, such as the comprehensive deportation plan, Kashkari pointed out that the inflation threat is still unclear, so the Fed still takes a "wait-and-see" approach before adjusting its policy.

Trump and his supporters, such as billionaire Musk, also openly express their desire for the president to provide input on the Federal Reserve's policy decisions. The Federal Reserve considers its political independence as a core feature that enables it to formulate monetary policy based solely on the health of the US economy rather than electoral motivations.