WASHINGTON, United States (AFP)— Donald Trump’s tariff policy has caused a “marked increase” in the risks of higher inflation and slower growth, a senior Federal Reserve official said Thursday, adding he would prioritise tackling inflation.

The US president’s stop-start tariff rollout has roiled global markets, and tanked consumer confidence, although it has not yet fed through into higher prices for consumers.

“Relative to earlier this year… it appears as though we have seen a marked increase in the upside risks around inflation along with elevated downside risks to the outlook for employment and growth,” Kansas City Fed President Jeff Schmid told an event in the city.

“Based on what I have heard from our business contacts, there is a growing possibility that in setting policy the Fed will have to balance inflation risks against growth and employment concerns,” he said.

“When contemplating this balance, I intend to keep my eye squarely focused on the outlook for inflation,” added Schmid, who is a voting member of the Fed’s rate-setting committee this year.

Schmid also warned of the potential for tariffs to have a long-lasting impact on inflation.

“While in theory, tariffs may have only temporary effects on inflation… I would be hesitant to take too much solace from theory in this environment,” he said.

“I am not willing to take any chances when it comes to maintaining the Fed’s credibility on inflation,” he added.

Financial markets see a roughly 80 percent probability that the Fed will make no change to its interest rate next month, holding it at between 4.25 percent and 4.50 percent, according to data from CME Group.