Immediate Impact of Trade Conflict

Federal Reserve Bank of Richmond President Thomas Barkin shared insights with Axios on Wednesday, highlighting the potential for reduced employment and increased consumer costs as a result of ongoing trade conflicts. However, he noted that the full impact on prices might not be felt until mid-year.

Businesses Struggle with Uncertainty

"As I've talked to business people, they're still struggling to have confidence in where this lands," Barkin stated. He explained that most businesses currently have enough inventory to delay price increases until June, rather than implementing them immediately in April.

Consumer Pushback and Economic Dilemmas

The Fed official also pointed out that while businesses plan to pass the increased costs from tariffs onto consumers, they may face resistance from shoppers already burdened by recent inflation. Barkin highlighted the complex challenge of addressing unemployment through rate reductions without exacerbating inflation.