Chicago Fed Pres. Goolsbee:

  • Tariffs are much worse than what we have been modeling
  • Fed has to take the longer view, not like the stock market which is volatile
  • Disagreement on how quickly or how much tariff increase will get past to the consumers.
  • Could lead to bankruptcies of suppliers.
  • Not obvious how Fed would react to negatives supply shock.
  • Sentiment measures are almost cratering, that a concern.
  • Relationship of sentiment to spending isn't as strong as before.
  • Many people fear for their financial safety.
  • Businesses also aren't going to invest when it's not clear what the rules are.
  • Anxiety that high inflation will return.
Source: Forex Live