St. Louis Federal Reserve President Alberto Musalem said on Friday he's closely watching whether a rise in short-term inflation expectations seeps into longer-term expectations, a development that could make fighting inflation a much harder job and reduce the U.

Officials at the Federal Reserve said this week that the U.S. economy is in for higher inflation and slower growth as President Donald Trump's trade war heats up. Several Fed officials indicated that inflation is their biggest concern.

President Donald Trump’s tariff increases will be significantly larger than expected, likely increasing the risk of higher inflation and slower economic growth, Federal Reserve Chairman Jerome Powell said Friday.