- I would like us to get a read on whether tariffs are hurting productivity
- Imported goods are only 11% of GDP so the impact of tariffs could potentially be modest
- We’ve got short-run inflation expectations up, but long-run expectations not rising is very important
- We have to get through the ‘wait it out’ impulse around tariffs and trade
- We need to wait it out to figure out what to do
- If tariffs were a certain one-off without retaliation or supply chain problems, then I would lean towards cuts
- Highlights that tariffs haven’t helped steel production, instead there are layoffs
Citigroup has shifted its call this morning on the Fed, seeing the next cut in June rather than May. They still see 125 bps in cuts this year.
This article was written by Adam Button at www.forexlive.com.
