International taxes

The Federal Reserve Board governor said higher import tariffs could have a "persistent" impact on inflation.

The Treasury market experienced unexpected volatility in April after President Trump announced sweeping tariffs, but recovered after the moves were delayed. Some see that as proof of resilience in the market, but others say it highlights vulnerabilities.

Federal Reserve Gov. Christopher Waller said changes to the Federal Open Market Committee's quarterly economic projections could lead to clearer communication with markets and market participants.

The Federal Reserve's preferred measure of inflation moved closer to the 2% target last month, but the impact of tariffs remains to be seen.

Federal Reserve Vice Chair Philip Jefferson said in a speech Wednesday that elevated tariffs will likely lead to inflation, but time will tell how impactful that spike in prices might be.

A 90-day pause on reciprocal tariffs between the U.S. and China boosted the near-term economic outlook for banks, but tensions and uncertainty around trade barriers remain high.

Federal Reserve Gov. Adriana Kugler said in a speech in Dublin that trade barriers could soon affect prices and slow down growth while increasing uncertainty in 2025.

Federal Reserve Gov. Michael Barr said global supply chain disruptions and inflation caused by tariffs could weigh heaviest on small businesses, especially those with little access to credit.

Their worries center on fears the new duties could impact their personal finances, according to a new survey from home-equity investment platform Point.

Treasury Secretary Scott Bessent said he expects negotiations with trading partners over tariffs to conclude by the end of the year but acknowledged that talks with China had not yet begun.

The Federal Reserve's preferred inflation reading fell in March, but the positive reading came before new trade policies hit the economy.

President Trump suggested his sweeping tariffs would help him reduce income taxes for people making less than $200,000 a year.

The president said he had "no intention" of firing the Federal Reserve chair and promised that tariffs against Chinese imports would be lowered "substantially."

The International Monetary Fund lowered its economic growth projections for 2025, citing policy uncertainty. It also urged central banks to stand ready to use macroprudential tools to facilitate lending in a potential recession.

Even with various tariff pauses and exemptions, suppliers are raising prices due to ongoing policy uncertainty, and consumers also are altering their behavior.

Fifth Third Bancorp revised its guidance, but still expects record net interest income for 2025, even as commercial clients signal that economic volatility will drive up inflation.

The super-regional bank cited "a material slowdown" in investment banking and trading income as one reason for the lower revenue forecast. Interest rates are also a factor, executives said.

As tariff turbulence continues, BofA is predicting a slowdown, not a downturn. But America's second-largest bank is also signaling that it's prepared for a more severe scenario.

Bessent reiterated his interpretation of the decline being mainly a product of deleveraging, saying he had no evidence that sovereigns were behind the drop.

Federal Reserve Board member Christopher Waller said he would not be deterred from classifying inflation as "transitory" despite the board's recent experience underestimating inflationary pressures.