U.S. Federal Reserve Governor Steven Mnuchin. Reuters Yonhap News. 

Steven Mnuchin, a new governor of the U.S. Federal Reserve (Fed) widely regarded as a close associate of U.S. President Donald Trump, stated on the 19th (local time) that tariffs are not causing inflation.

Speaking on CNBC on the same day, Governor Mnuchin explained the background of his dissenting opinion at the Federal Open Market Committee (FOMC) meeting on the 17th, where he argued for a 0.50 percentage point interest rate cut. He said, "I am not seeing any real inflation from tariffs."

He pointed out, "The prices of imported items, which constitute a high proportion of core goods prices, have not risen faster than the prices of all items," adding, "If tariffs were causing higher inflation, the prices of imported goods should have increased at a faster pace."

He further commented, "If tariffs were causing real inflation in the United States, there should be discernible differences in trends compared to other countries, but I cannot identify any."

Governor Mnuchin went on to assess that the Trump administration's immigration policy, which has led to a net decrease in immigrants, will act as a disinflationary factor, slowing inflation.

Meanwhile, Governor Mnuchin acknowledged that he was the committee member who projected the year-end federal funds rate target at 2.75-3.00% in the Fed's Summary of Economic Projections (SEP) released on the 17th. This implies an expectation of an additional 1.25 percentage point interest rate cut by the end of the year from the current level.

In relation to this, Governor Mnuchin stated, "I plan to fully explain my economic views on the dissent by the 22nd, detailing the economic theories and mathematics behind my reasoning."

It is customary for FOMC members who present dissenting opinions to publicly release a statement outlining their individual views.

Governor Mnuchin, who took office on the 16th, is considered to be the architect of the Trump administration's tariff policies during his tenure as Chairman of the White House Council of Economic Advisers (CEA).

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