Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee hit newswires for a second time on Thursday, adding extra caution that ongoing trade tensions will continue to make it harder, not easier, for the Fed to adjust policy rates, regardless of how much the markets and the Trump administration may want rates to go down.
Key highlights
The current tariffs will drive up inflation in the near term, and hurt growth.
Now is the time for the US central bank to wait and see on interest rates.
The bar for Fed policy change now is pretty high.
Long-term treasuries still appear to be the safest asset in the world.
I prefer market inflation expectations data over surveys.
The current data suggest the job market is still solid.
I won’t speculate on how the Fed would respond to a market stress event.
Broad financial conditions indices can be hard to read.
The bond market selloff showed that the US was not the only nation getting hit.
The solid 10-year treasury auction reduced my worry about the market.
Current tariffs are higher than most scenarios, even with Trump's pause.
The current tariff system is a big scenario.
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