Fed Officials Warn of the Challenge Trump Tariff ‘Uncertainty’ Poses | Global News Avenue

Federal Reserve officials on Friday articulated what the central bank will do in terms of tariffs and how import taxes affect inflation and unemployment.

Austan Goolsbee, president of the Federal Reserve Bank of Chicago and John Williams, president of the Federal Reserve Bank of New York, said “uncertainty” is the main reason for central bank choices Keeping its influential Fed funding rate unchanged on Wednesday. Their comments were posted in separate public places, with details added to the statement Wednesday to explain the interest rate decision. Both are members of the Federal Open Market Committee, the Federal Reserve’s decision-making body.

“When uncertainty, you have to wait for the dust to fall off,” Goolsbee said on CNBC. “It’s hard to see what we’re doing because the dust has to be removed.”

Williams noted that the economy performed well, including inflation getting closer to the Fed’s age of 2% and a goal to maintain a solid job market.

“This is where you stand now, but the future is highly uncertain,” he said in a speech prepared before appearing at the Bahamas Conference. “And my business and financial markets are linked to the role of greater uncertainty, especially around trade policy, and it becomes more difficult to plan investment and recruitment.”

Comments illustrate the Fed’s Challenge April 2 deadline Trump has set Adopt a broad new tariff approach. Central banks aim to keep inflation low, employment high, tariffs can Cause setbacks on these two goalsdepending on the height of import taxes, the wide range of applications and the time they have been in place. The Fed usually raises interest rates to slow down the economy to fight inflation and lower them to boost the economy and fight unemployment, so all of these issues together make the Fed choose between painful choices.

Before the tariff turmoil, the Fed had lowered benchmark feed rates from two decades of highs, The buzzword for surgery is “soft landing” Not “uncertainty”. Inflation has significantly lowered from the post-pandemic surge, while the job market has avoided a surge in unemployment, a rare example of the history of insufficient inflation without recession and massive layoffs.

The source of all “uncertainty” is Trump’s tendency to announce tariffs recently, setting deadlines, Just to cancel or change themlet consumers and business leaders guess what he will do next. This uncertainty is Rotten financial markets In recent weeks.

But at least one independent economist suspects that “uncertainty” is the real problem. Many forecasters after Trump was elected Assuming Trump’s tariff threat is negotiating strategiesbut Trump’s actions have already poured cold water on this assumption.

“The problem is not uncertainty about tariffs,” Robert Fry, an independent economist and forecaster, wrote in a comment to clients. “There is growing possibility that President Trump intends to maintain tariffs for a long time, raise revenues and transfer manufacturing back to the United States, rather than using them as leverage to enable other countries to reduce their trade barriers.”