A top Federal Reserve official said Monday that the impact of President Donald Trump’s trade war on prices would be “transitory,” echoing a term that central bankers and Biden administration officials used often as inflation soared in the aftermath of the pandemic.
The remarks by Federal Reserve Governor Christopher Waller, who was appointed by Trump during the president’s first term, sought to play down as temporary the effect that Trump’s sweeping tariffs could have on inflation. And it came after both Fed and Biden officials were increasingly mocked for using the term “transitory” to describe the inflation of his term, which persisted at higher levels and for longer than they expected.
“Under the large tariff scenario, economic growth is likely to slow to a crawl and significantly raise the unemployment rate,” Waller said during a policy speech in St. Louis, according to a Fed transcript. “I do expect inflation to rise significantly, but if inflation expectations remain well anchored, I also expect inflation to return to a more moderate level in 2026. Inflation could rise starting in a few months and then move back down toward our target possibly as early as by the end of this year.
“Yes,” he went on, “I am saying that I expect that elevated inflation would be temporary, and ‘temporary’ is another word for ‘transitory.’ Despite the fact that the last surge of inflation beginning in 2021 lasted longer than I and other policymakers initially expected, my best judgment is that higher inflation from tariffs will be temporary. If this inflation is temporary, I can look through it and determine policy based on the underlying trend. I can hear the howls already that this must be a mistake given what happened in 2021 and 2022. But just because it didn’t work out once does not mean you should never think that way again. Let me use a football analogy to characterize my thoughts.”
He went on to invoke what’s known as “The Tush Push,” a football play famously run almost to perfection by the 2025 Super Bowl Champion Philadelphia Eagles, to explain his view. “The Tush Push,” also known as “The Brotherly Shove,” is effectively a type of quarterback sneak used for very short yardage plays. Players on the Eagles line up behind quarterback Jalen Hurts and help push him over the first down marker or the goal line against opposing defenses. The Eagles have become so effective at executing the play that some other teams in the NFL want to ban it.
Waller went on.
“You are the Philadelphia Eagles and it is fourth down and a few inches from the goal line,” he said. “You call for the Tush Push but fail to convert by running the ball. Since it didn’t work out the way you expected, does that mean that you shouldn’t call for the Tush Push the next time you face a similar situation? I don’t think so. With the history of 2021 and 2022 still in my mind, I believe my analysis of the effect of tariffs is the right call, and I am going to stick with my best judgment.”