Fed's Goolsbee: Trump's rising tariffs fuel US economic strains

Federal Reserve Bank of Chicago (Fed) President Austan Goolsbee is expressing concern about economic tensions arising from a possible escalation of import duties.

Reuters reports that global markets experienced a downturn after US President Donald Trump announced a series of sweeping tariffs last week. This announcement led to a rapid escalation of trade disputes. China and the EU quickly retaliated by proposing increased levies on products from the United States. In response, Trump threatened even harsher duties.

Goolsbee voiced concern that widespread tariffs could trigger conditions reminiscent of the high inflation period experienced in the United States between 2021 and 2022.

In a statement released on Monday, the official acknowledged the prevailing uncertainty and risks associated with potential shifts in consumer and business spending in the United States. He emphasized that the financial regulator will carefully analyze “credible data” before determining any policy response.

Goolsbee highlighted the possibility of a challenging economic scenario in the current environment. He stated that the regulator's response will depend on price dynamics and the pace of growth of the US economy.