Federal Reserve policymakers noted the potential for higher tariffs to contribute to inflation remaining above the central bank's 2% target rate in the minutes from their last meeting.

Asian shares fell sharply on Thursday, tracking choppy trading on Wall Street and a dip in European stocks as U.S. President Donald Trump's tariff plans and a cautious stance from Federal Reserve policymakers hurt risk sentiment.

The model currently indicates that the effective Fed funds rate is nearly in line with the model’s estimate for an equilibrium rate. In other words, the Fed funds rate is more or less appropriate for current conditions. But given fast-moving events in Washington lately, the definition of “appropriate” could evolve quickly.