Federal Reserve officials are prepared to hold their policy rate steady to minimize the risk that President Donald Trump’s tariffs trigger a persistent rise in inflation, even if the labor market softens further. In public comments and interviews, a number of officials have sent a clear signal they are ruling out interest rate cuts that would act as an insurance policy against any tariff-induced economic slowdown. Policymakers are instead doubling down on their commitment to keep inflation—and Americans’ expectations for price growth—in check, a posture that will likely keep them on hold absent a significant rise in unemployment.

“Given the paramount importance of keeping long-run inflation expectations anchored and the likely boost to near-term inflation from tariffs, the bar for cutting rates, even in the face of a weakening economy and potentially increased unemployment, is higher,” Minneapolis Fed President Neel Kashkari wrote in an essay released yesterday morning. “The hurdle to change the federal funds rate one way or the other has increased due to tariffs.”