Chicago Fed Pres. Goolsbee:
- Tariffs are much worse than what we have been modeling
- Fed has to take the longer view, not like the stock market which is volatile
- Disagreement on how quickly or how much tariff increase will get past to the consumers.
- Could lead to bankruptcies of suppliers.
- Not obvious how Fed would react to negatives supply shock.
- Sentiment measures are almost cratering, that a concern.
- Relationship of sentiment to spending isn’t as strong as before.
- Many people fear for their financial safety.
- Businesses also aren’t going to invest when it’s not clear what the rules are.
- Anxiety that high inflation will return.
This article was written by Greg Michalowski at www.forexlive.com.
