A top Federal Reserve official warned it would be “a mistake” to underestimate the potential for Donald Trump’s planned tariffs to push up prices.
Austan Goolsbee, president of the Chicago Fed, on Wednesday said central banks’ tendency to follow “pure economic theory” and ignore supply shocks such as tariffs was “dangerous”.
The US faced a “series” of challenges to the supply chain, Goolsbee said, including strikes and natural disasters. The economy also faced “the threat of large tariffs and the potential for an escalating trade war”, he added.
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