Chicago Fed President warns of pullback in US consumer spending caused by import tariffs

Federal Reserve Bank (Fed) of Chicago President Austan Goolsbee warns that the US administration’s import tariffs could lead to a decline in consumer spending and investment. 

The official noted the possibility of duties having a long-lasting impact on prices in the US. This could be fueled by retaliatory tariffs. Besides, some levies could hit so-called intermediate goods used in local manufacturing. Heightened uncertainty around Donald Trump's trade policies has also made businesses and consumers more cautious.

At the same time, Chicago Fed President still expects the US central bank to cut rates over the next 12–18 months. He thinks the country’s economic growth remains solid, despite weakening survey measures of consumers and businesses.

Trump is to announce sweeping tariffs on April 2. Most Fed officials say monetary policy currently allows the regulator to wait and see the impact of import duties on the country's economy.