{"id":16010,"date":"2025-02-05T19:47:59","date_gmt":"2025-02-05T19:47:59","guid":{"rendered":"https:\/\/financialrush.com\/?p=16010"},"modified":"2025-02-05T19:47:59","modified_gmt":"2025-02-05T19:47:59","slug":"top-federal-reserve-official-says-it-would-be-mistake-to-ignore-tariff-risks","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=16010","title":{"rendered":"Top Federal Reserve official says it would be \u2018mistake\u2019 to ignore tariff risks"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Unlock the White House Watch newsletter for free<\/p>\n<p class=\"article__content-sign-up-topic-description\">Your guide to what the 2024 US election means for Washington and the world<\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=d29ce1f6-d915-45f2-a546-846f4d10bf6e&amp;newsletter-id=65b8fec772badb00166eafc6\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>A top Federal Reserve official warned it would be \u201ca mistake\u201d to underestimate the potential for Donald Trump\u2019s planned tariffs to push up prices.<\/p>\n<p>Austan Goolsbee, president of the Chicago Fed, on Wednesday said central banks\u2019 tendency to follow \u201cpure economic theory\u201d and ignore supply shocks such as tariffs was \u201cdangerous\u201d. <\/p>\n<p>The US faced a \u201cseries\u201d of challenges to the supply chain, Goolsbee said, including strikes and natural disasters. The <a href=\"https:\/\/www.ft.com\/us-economy\" data-trackable=\"link\">economy<\/a> also faced \u201cthe threat of <a href=\"https:\/\/www.ft.com\/content\/c2e48c17-e3a1-4967-b421-a7d857ae1b7b\" data-trackable=\"link\">large tariffs<\/a> and the potential for an escalating trade war\u201d, he added.<\/p>\n<p>\u201cThese threats are not of the scale of what occurred during the pandemic but passing over their potential consequences would be a mistake,\u201d he said. <\/p>\n<p>The comments from one of the Fed\u2019s top officials, and a member of the central bank\u2019s rate-setting panel, come just days after the president threatened to impose 25 per cent tariffs on two of the US\u2019s biggest trade partners, Mexico and Canada. <\/p>\n<p>Trump on Monday afternoon said he was postponing the levies on Canada and Mexico until March 1 but hit China with tariffs of 10 per cent, prompting Beijing to announce tariffs of its own on some US imports.<\/p>\n<p>Goolsbee\u2019s remarks contrast with Fed chair Jay Powell, who last week said rate-setters would need to \u201cwait and see\u201d the impact of <a href=\"https:\/\/www.ft.com\/content\/3847def5-9c3b-4a1f-96db-caad010faa49\" data-trackable=\"link\">tariffs<\/a> before deciding how they would affect their interest rate decisions.<\/p>\n<p>Following the decision to hold interest rates in the 4.25 per cent to 4.5 per cent range, Powell said: \u201cWe don\u2019t know what\u2019s going to be tariff[ed], we don\u2019t know for how long or how much, what countries, we don\u2019t know about retaliation, we don\u2019t know how it\u2019s going to transmit through the economy to consumers. That really does remain to be seen.\u201d <\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image o-teaser--opinion js-teaser\" data-id=\"7f33acaa-61e6-4ee9-9ab8-9e4913fb70ff\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/7f33acaa-61e6-4ee9-9ab8-9e4913fb70ff\" data-trackable=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2290\/1288\"><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>Still, most private economists expect tariffs to be inflationary, and expectations for Fed rate cuts this year have fallen considerably since autumn as price growth has remained above the central bank\u2019s target.<\/p>\n<p>Goolsbee said the \u201coverwhelming\u201d lesson from the pandemic was that central bankers should not ignore <a href=\"https:\/\/www.ft.com\/content\/3847def5-9c3b-4a1f-96db-caad010faa49\" data-trackable=\"link\">supply-side shocks<\/a>, saying these had been \u201cthe most important drivers of inflation over the past five years\u201d. <\/p>\n<p>\u201cWe saw in Covid times that the more complex the supply chain, the longer it took to manage,\u201d he said in prepared remarks. <\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/d29ce1f6-d915-45f2-a546-846f4d10bf6e\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the White House Watch newsletter for free Your guide to what the 2024 US election means for&hellip;\n","protected":false},"author":6,"featured_media":16011,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-16010","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/16010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16010"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/16010\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/16011"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}