Federal Reserve (Fed) Bank of Richmond President Tom Barkin pummeled market hopes for rate cuts on Wednesday, noting that the Fed is broadly anticipating negative effects from both ends of the US’s self-styled trade war.
Key highlights
Tariff price hikes could begin by June.
Businesses struggling with confidence.
Price surges requires the Fed to be cautious.
Tariffs are to hit both inflation and employment.
I worry if we’re close to a moment where consumers decide to pull back; so far that has not happened.
Consumers are still spending, but we’re watching it.
Equity market correction isn’t what leads to a consumer pullback.
People are pulling back on air travel, but not on everyday spending.
If we see higher inflation and higher unemployment, the Fed would handle the response with judgment.
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