Federal Reserve (Fed) Bank of Richmond President Thomas Barkin hit newswires on Thursday, warning that incoming economic uncertainty at the hands of the Trump administration’s lopsided trade policy will force the Fed into a wait-and-see approach than most investors are hoping for.
Key highlights
Fed waiting for uncertainty to clear before acting.
Federal policy changes create instability in near term.
Uncertainty-driven drop in sentiment could quiet demand.
Moderately restrictive policy stance a good place to be.
It’s hard to imagine the labor market will break toward hiring.
Regarding tariffs, given recent high inflation there could be more of an impact on prices, but it is still not known where rates will settle or how affected countries businesses and consumers will respond.
Direction of Federal policy changes may be known, but extent and how they net out in the economy remains uncertain.
Current levels of uncertainty could dampen consumer and business spending.
Bankers desire certainty from regulatory agency.
