Fed’s Goolsbee: Business contacts are waiting on capital spending in light of tariffs

• When you have a lot of uncertainty you have to wait for things to clear up
• There has been a decided turn towards anxiety and waiting on capital spending among business contacts
• Fed needs to be a steady hand and take the long view on the economy
• Still a lot of strength in the economy right now
• Imports are only 11% of GDP, so one time tariffs that are not followed by retaliation are more likely to be transitory
• Before judging how monetary policy reacts to tariffs, Fed needs to know how long the tariffs last, possible retaliation, pass through to consumers
• The bigger the tariff supply shock is, the harder it will be for the Fed to look through them
• I’m not a hawk or a dove, I’m a data dog

He’s framing tariffs and offering a sense of how the Fed is looking at them.

This article was written by Adam Button at www.forexlive.com.