Stagflationary Shock from Tariffs

Federal Reserve Bank of Chicago President Austan Goolsbee highlighted on Wednesday that tariffs are not just a temporary hurdle but a "stagflationary shock" to the economy. He expressed concerns over the underestimation of tariffs' long-term inflationary effects and their potential to dampen productivity growth.

Monetary Policy Caution

Regarding the possibility of a rate cut in the upcoming September Federal Open Market Committee (FOMC) meeting, Goolsbee emphasized a cautious approach. He stated the importance of not pre-committing to policy changes without a thorough review of current inflation trends.