Fed's Goolsbee: A tariff is like a stagflationary shock, challenging for Fed
Federal Reserve (Fed) Bank of Chicago President noted on Thursday that the most challenging aspect of managing the US economy from the Fed's side of the data docket is knock-on effects from the US's lopsided trade and tariff policy approach, which poses a direct threat to consumer confidence and outlook stability.
Key highlights
The Fed timetable is not the market timetable.
Our goal is to find through line, not jump to conclusions.
The Fed's job is to be cautious in volatile times.
The hard data on economy looks pretty good.
Unemployment rate is around full employment.
Economy has been moving toward the golden path.
Importance of soft data has gotten more important due to less lag.
There's an argument short-run tariffs would not alter economy's path.
If confidence is lost it could cause economic problems.
There is a lot of anxiety in the Chicago Fed district.
Lots of fears of returning to pandemic era economic conditions.
A tariff is like a stagflationary shock, challenging for Fed.
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
