Federal Reserve Governor Christopher Waller said Monday he expects the impacts of President Donald Trump’s tariffs on prices to be “transitory,” embracing a term that got the central bank in trouble during the last bout of inflation.

“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,” Waller said in remarks for a policy speech in St. Louis that compared his inflation view to the controversial “Tush Push” football play.

Laying out two scenarios for what the duties eventually will look like, Waller said larger and longer-lasting tariffs would bring a larger inflation spike initially to a 4%-5% range that eventually would ebb as growth slowed and unemployment increased. In the smaller-tariff scenario, inflation would hit around 3% and then fall off.

Either case would still see the Fed cutting interest rates, with timing being the only question, he said. Larger tariffs might force a cut to support growth, while smaller duties might allow a “good news” cut later this year, Waller added.

“Yes, I am saying that I expect that elevated inflation would be temporary, and ‘temporary’ is another word for transitory,'” he said. “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.”

The “transitory” term harkens back to the inflation spike in 2021 that Fed officials and many economists expected to ease after supply chain and demand factors related to the Covid pandemic normalized.

However, prices continued to rise, hitting their highest since the early 1980s and necessitating a series of dramatic rate hikes. While inflation has pulled back substantially since the Fed started raising in 2022, it remains above the central bank’s 2% target. The Fed cut its benchmark borrowing rate by a full percentage point in late 2024 but has not cut further this year.

A Trump appointee during the president’s first term, Waller used a football analogy to explain his views on “transitory” inflation. He cited the Philadelphia Eagles’ famed “Tush Push” play that the team has used to great effect on short-yardage and goal line situations.

“You are the Philadelphia Eagles and it is fourth down and a few inches from the goal line. You call for the Tush Push but fail to convert by running the ball,” he said. “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.”

Waller estimated that Trump has either of two goals from the tariffs: to keep the levies high and remake the economy, or use them as negotiating tactics. In the first case, he sees growth slowing “to a crawl” while the unemployment rate rises “significantly.” If the tariffs are negotiated down, he sees the impact on inflation to be “significantly smaller.”

In the other case, he said “one of the biggest shocks to affect the U.S. economy in many decades” is making forecasting and policymaking difficult. Fed officials will need to “remain flexible” in deciding the future path.

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Consumer worries grew over inflation, unemployment and the stock market as the global trade war heated up in March, according to a Federal Reserve Bank of New York survey released Monday.

The central bank’s monthly Survey of Consumer Expectations showed that respondents saw inflation a year from now at 3.6%, an increase of half a percentage point from February and the highest reading since October 2023.

Along with concerns over a higher cost of living came a surge in worries over the labor market: The probability that the unemployment rate would be higher a year from now surged to 44%, a move up of 4.6 percentage points and the highest level going back to the early Covid pandemic days of April 2020.

The survey also showed angst about the uncertainty translating into problems for stock market prices.

The expectation that the market will be higher a year from low slid to 33.8%, a decline of 3.2 percentage points to the lowest reading going back to June 2022. While the expectations for equities pulled back, respondents said they figure gold to rise by 5.2%, the highest since April 2022.

The survey reflects other readings, such as the University of Michigan consumer sentiment survey, which showed one-year expectations in mid-April at their highest since November 1981.

In the case of the New York Fed measure, the survey took place ahead of President Donald Trump’s April 2 “liberation day” tariff announcement, as well as the 90-day suspension of the order a week later. However, it is largely consistent with other measures reflecting consumer concern over the impact tariffs will have, even as market-based measures show inflation worries are low among traders.

Expectations for inflation at the five-year horizon actually edged lower to 2.9%, down 0.1 percentage point, and were unchanged for the three-year outlook at 3%. The outlook for food prices a year from now nudged up to 5.2%, its highest since May 2024, and was at 7.2% for rent, an increase of half a point. The outlook for medical care costs also jumped to an expected 7.9% increase, the most since August 2024.

Respondents expect gasoline to rise by 3.2%, a 0.5 percentage point drop from the February outlook.

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