- We will be moving away from goals for the balance of the year, perhaps we can resume next year
- Tariffs are higher than we expected even in our upside case
- To the extent it takes longer for tariffs to hit, that risks higher inflation expectations
- Our role is to make sure this is a one-time increase in prices only
- CEOs he spoke with yesterday say uncertainty and imports are ‘a huge issue’
- Notes that covid shortages of chips led to disruption of autos and it contributed to inflation
- We are still at full employment
- Tension between goals would be a difficult position for the Fed
- We could well be in that situation and it will be a very difficult judgement
- There isn’t a modern experience for how to think about high tariff rates — these are higher that Smoot-Hawley
- Markets are orderly, functioning as would expect
- We stand ready to supply dollars to global central banks if needed
- Domestic discretionary spending is small and not the issue regarding US government debt
The stock market is selling off on his comments
This article was written by Adam Button at www.forexlive.com.