Before committing to significant investments or other decisions, US companies were looking for continuity in commercial policy, said Chicago Fed President Austan Goolsbee. He added that President Donald Trump’s last threat to impose 50% tariffs on the assets of the European Union was a “terrifying” possibility for supply chains.
Outstanding comments
- Companies tell the Fed that they want consistency in politics before making great decisions.
- A 50% tariff is an order of magnitude different from the current situation.
- The tariff rates would be scary for the supply chain.
- There is anxiety among companies that continuous tariff ads interrupt the supply chain and lead to an increasing price environment.
- In the short term, the Fed needs to wait for the situation to be clarified, the threshold for action is higher until that happens.
- If the tariffs have a stagning impact, then that is the worst situation for the Central Bank.
- A fear is that the data is lagging behind and the upcoming reports show a more serious impact of the actions already taken.
- To the extent that long -term yields are increasing, that can directly impact real activity, which would be taken into account in the Fed analysis.
- Interest rates are still within historical ranges, if there was a crisis on the fiscal stability of the US, they would be increasing.
- It still feels that, under volatility, the economy remains strong, if tariffs and uncertainty were not a threat, inflation could eventually fall.
- He feels gratified that it seems that the Supreme Court recognized the importance of the independence of the Fed.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
