Chicago Fed President Austan Goolsbee and San Francisco Fed President Mary Daly both sounded cautious overnight amid rising uncertainty from the unfolding global tariff war.
Goolsbee highlighted the unexpected magnitude of the tariff impact, calling them a “way bigger” shock than anticipated. He likened them to a “negative supply shock” and acknowledged that Fed’s appropriate policy response is unclear.
He warned of ripple effects through slower consumer and business activity, especially in a post-pandemic economy still scarred by past inflationary surges.
Meanwhile, Daly struck a more measured tone, noting that while she is “a little concerned” about the inflationary effects of tariffs, she emphasized Fed’s current policy is well-positioned and policymarkers can “just tread slowly and tread carefully.”
“The thing that’s really important is you stay steady in the boat while you think about not what’s happening over the last two days, but the net effect of the slate of changes that any administration wants to take,” she added.
