The president of the Bank of the Federal Reserve (FED) of Chicago, Austan Goolsbee, admitted that the effects of tariffs have remained well below what many political leaders initially feared, but expressed caution by pointing out that the Fed still needs to carefully observe the “soft” data to avoid being trapped in a crossfire between interest rates and inflation.
Key points
It is critical to observe soft economic data in this transition moment.
Tariffs are not different from oil clashes with stagflation implications.
The current form of uncertainty is disconcerting for the economy.
Until now, the impact of tariffs has not been as bad as it was feared.
The impact of tariffs has been attenuated by reduced levels and exemptions.
Less immediate transmission of tariffs compared to the past.
It is not clear at this time how tariffs will boost inflation.
The surprise so far is that inflation has increased despite tariffs.
If we do not see an increase in inflation due to tariffs, then the economy is still on the golden path.
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.
