Fed Governor Michael Barr highlighted solid growth, low unemployment, and continued progress on disinflation in the US economy. However, he flagged growing concern over rising trade-related uncertainty, which has begun to weigh on consumer and business sentiment.

In a speech overnight, Barr specifically pointed to the vulnerability of small businesses, which are more exposed to “disruptions to supply chains and distribution networks”.

These firms are integral to broader production networks, and failures in this segment could trigger cascading effects across the economy.

Drawing a parallel to the pandemic, Barr noted that “disruptions can have large and lasting effects on prices, as well as output,” leading to lower growth and higher inflation ahead.

Full speech of Fed’s Barr here.

At an event overnight, San Francisco Fed President Mary Daly said Fed is in a “good position” to respond to evolving conditions and uncertainties. She emphasized, “patience is the word of the day,”

“We’ve got solid growth, a solid labor market and declining inflation,” she said. Despite lingering uncertainties, overall sentiment remains constructive, with people feeling the economy is performing “fairly well.”

“It’s just a matter of resolving the uncertainty so we can continue to do very well,” Daly added.

Fed Vice Chair Philip Jefferson said in a speech today he supported last week’s decision to keep the federal funds rate unchanged, which he views as “moderately restrictive.” He noted that the current policy setting is “well positioned” to respond to a range of evolving economic conditions.

Jefferson pointed to a sharp decline in consumer and business sentiment this year, saying he is closely monitoring “hard data” for signs of weakening economic activity.

On the inflation front, he acknowledged that higher tariffs could add upward pressure to prices in the months ahead, though it remains uncertain whether such effects would prove “temporary or persistent.”

With elevated risks to both sides of the dual mandate, Jefferson said “the current stance of monetary policy is well positioned to respond in a timely way to potential economic developments.”

Full speech of Fed’s Jefferson here.

Chicago Fed President Austan Goolsbee cautioned against overinterpreting April’s softer inflation data, noting on NPR that it’s still too early to gauge the true impact of rising US import tariffs.

While recent consumer price figures suggest inflation may be easing, Goolsbee stressed that Fed needs more clarity before making firm policy judgments, describing the current environment as one filled with “a lot of dust in the air.”

He acknowledged that the data so far “suggest that it’s going okay,” but emphasized the difficulty of drawing long-term conclusions amid ongoing short-term volatility.

“It’s just not realistic,” he said, “to expect businesses or central banks to be jumping to conclusions” in such an uncertain setting.