Fed's Goolsbee: Impact of tariffs on macro economy could be modest
In an interview with CNBC on Monday, Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee noted that short-run inflation expectations are up and added that it's very important for long-run inflation expectations not to rise.
Key takeaways
"Fed needs to look to where things will be through the year, tariffs are one input."
"Productivity growth has been strong, want to understand if tariffs affect that."
"Impact of tariffs on macro economy could be modest."
"We need to wait it out to figure out what to do."
"It would be difficult if both sides of Fed's mandate go wrong; it's also about magnitude and how long it lasts."
"We don't know what impact on supply chain will be."
"We want to be a steady hand."
"Fed chair is most important person at the table, their opinion carries a lot of weight."
"Fed independence is critically importance."
"Inflation rate is higher in countries where there is political interference."
Market reaction
The US Dollar (USD) stays under persistent selling pressure following these comments. At the time of press, the USD Index was down 1.2% on the day at 98.20.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
