Fed officials note abundance of uncertainty in Trump's policy moves
Federal Reserve officials on Wednesday pointed to the large policy uncertainty around tariffs and other issues arising from the early days of President Donald Trump's administration as among the top challenges in figuring out where to take U.S. monetary policy in the months ahead. Chicago Fed President Austan Goolsbee warned that ignoring the potential inflationary impact of tariffs would be a mistake, whereas Richmond Fed President Thomas Barkin said it remains impossible at this early stage to know where cost increases from any tariffs might be absorbed or passed along to consumers. The views of the two U.S. central bankers were emblematic of the cautious approach Fed officials are angling to take in deciding whether to resume interest rate cuts later this year or continue to keep them on hold. The Fed left its benchmark interest rate unchanged last week in the 4.25%-4.50% range after cutting it at three straight meetings to close out 2024.
The U.S. economy is strong, the labor market is «plausibly» at full employment, and inflation has come down and is approaching the Fed's 2% goal, Goolsbee said in remarks prepared for delivery to the Chicago Fed's annual auto symposium in Detroit.
«Yet we now face a series of new challenges to the supply chain — natural and man-made disasters from fires and hurricanes to collisions with bridges that take out major ports, canal cloggings and threats of dockworker walkouts; geopolitical disruptions; immigration; and, of course, the threat of large tariffs and the potential for
