- I would like us to get a read on whether tariffs are hurting productivity
- Imported goods are only 11% of GDP so the impact of tariffs could potentially be modest
- We’ve got short-run inflation expectations up, but long-run expectations not rising is very important
- We have to get through the ‘wait it out’ impulse around tariffs and trade
- We need to wait it out to figure out what to do
- If tariffs were a certain one-off without retaliation or supply chain problems, then I would lean towards cuts
- Highlights that tariffs haven’t helped steel production, instead there are layoffs
- Fed chair is most important person at the table, their opinion carries a lot of weight
- There is a lot of dust in the air but ultimately think we can lower rates “if we can just get back on that path”
- Still believe rates will be lower in 12-18 months
Citigroup has shifted its call this morning on the Fed, seeing the next cut in June rather than May. They still see 125 bps in cuts this year.
There wasn’t much of anything new here.
This article was written by Adam Button at www.forexlive.com.
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