In a CNN interview, St. Louis Fed President James Bullard said trade uncertainty used to be an issue that was on the “back burner”. However, “the president moved it to the front burner”. And now, “trade uncertainty is high and I don’t see that declining anytime soon”.
Bullard added that the economy is “slowing down” and warned “what if it slows more than we think, possibly because of a trade war?”. A rate cut would “provide a bit of insurance against that”.
Nevertheless, regarding a 50bps cut, Bullard said “I don’t think we need to go that far” adding that “the critical thing here is to get inflation and inflation expectations better centered.”
