Latest news with #ChristopherWaller
Khaleej Times
3 days ago
- Business
- Khaleej Times
Trump's tariff blitz prompts 'firefighting' response from Fed researchers
U.S. Federal Reserve staffers have scrambled since January to decipher what Trump administration trade policies will mean for the economy, with published tallies of potential income losses, inflation estimates running as much as 2 percentage points higher, and breakdowns showing state-by-state winners and losers. The research papers and notes, at least a dozen and counting, have taken different approaches to estimate the implications of the still evolving trade war, which has pushed U.S. import taxes to levels not seen in decades and, at times, to their highest since the Great Depression. Given the shifting administration announcements, with some of the stiffest tariffs now on hold, none stands out as a definitive take. But the research effort has been systemwide and steady, reflecting the overarching role of trade policy in the national economic debate and in Fed deliberations over monetary policy. The Fed held its policy interest rate steady in the 4.25% to 4.5% range at its last meeting, with officials saying they are reluctant to change it until they know which way inflation and jobs will pivot. Minutes of that meeting will be released on Wednesday and may provide more detail about how Fed staff and policymakers perceive the impact of the tariffs imposed so far. Fed governor Christopher Waller said in a May 14 speech the central bank is in "firefighting" mode to understand what he has called "one of the biggest shocks to affect the U.S. economy in many decades" -- an all hands effort to analyze a potential rewrite of the global trading system after decades of closer economic integration among nations. After Trump's April 2 tariff announcements proved larger and more extensive than anticipated, "questions were asked of staff around the Federal Reserve system such as, 'What will this do to the U.S. economy? What will happen to inflation and unemployment?,'" Waller said "The answers to these questions are obviously time sensitive." The ongoing research, Fed officials say, will be particularly useful once the final tariff rates and any retaliatory steps by other nations are in place. But staff's initial findings and analysis may already be influencing the debate, generally undergirding Fed officials' topline conclusion that tariffs will raise prices paid by U.S. households and lower purchasing power. Administration officials argue that the tariffs and trade details they will impose or negotiate will raise money for the U.S. Treasury and boost U.S. manufacturing jobs without sparking higher inflation. INFLATION IN FOCUS Fed researchers have been particularly keen to understand how import taxes influence prices, a complex process that depends on things that shift in reaction to each other, like the willingness of producers or retailers to offset tariffs with lower profits, and the ability of consumers to pay more for imported goods, change what they buy, or forego some purchases altogether. A May note by Fed board economists estimated that the tariffs imposed on China in February and March had already added about a third of a percentage point to goods prices excluding food and energy in the first months of the year, and that but for the tariffs those prices would have fallen -- a conclusion that helps explain why policymakers are reluctant to cut interest rates until they know more about inflation that may be in the pipeline. Larger tariffs have been put in place since that study was done, and even bigger ones are threatened. "Once we start to get some clearer contours, I think that's the time to really start to use these models more robustly, " Atlanta Fed president Raphael Bostic said in comments to reporters on May 20 in Florida. A Boston Fed study in February of general inflation and an Atlanta Fed study released the same month looking at everyday consumer items both saw prices moving higher, with the estimates depending on the tariffs used to make the estimates. The fact that the final level of tariffs remains in such flux is another factor keeping Fed officials on the sidelines. Trump has said there will be a baseline tariff of 10% on imports, but some of the paused tariffs exceed 100%, and unexpectedly on Friday the president said there would be a 50% tariff on all imports from the European Union and a 25% levy on all imported iPhones. CONSUMPTION AND INCOME Along with rising prices Fed officials are concerned about how changes in trade policy may influence U.S. economic growth if consumers, for example, are left with less purchasing power. The Dallas Fed in May highlighted one of the hurdles to sorting that out. The outcomes for the U.S. economy depend heavily on whether other countries respond to Trump's tariffs with retaliatory levies on U.S. exports. A 25% across-the-board tariff without retaliation could actually boost U.S. consumption by around 0.5%, assuming that proceeds from the tariffs were funneled back to consumers, perhaps through tax cuts. The same tariffs with retaliation lead to an overall 1% decline in consumption, unevenly distributed across states with effects ranging from a 2.9% decline in Washington state to a 2.6% boost in Wyoming. As with any tax, tariff impacts vary from location to location based on the structure of the local company, with states that are exposed to global supply chains or whose citizens consume more imported goods likely to be hit harder than others. San Francisco Fed researchers, meanwhile, published a working paper in May that showed high tariffs and retaliation from other countries would lower inflation-adjusted income by 1% nationally, with the biggest hits felt in California, Texas, and the important political swing state of Michigan. RAISE PRICES OR FIRE WORKERS? Along with quantitative studies, the Fed has fielded surveys to ask businesses how they may respond to rising tariffs, a staple issue also in conversations officials and staff are holding around the country to sense whether firms are primed to raise prices or fire workers. Boston Fed researchers, in a survey of small business tariff-related expectations conducted just before Trump took office, found that firms on average anticipated less-aggressive tariffs than actually seen, with 20% tariffs seen imposed on China, 15% on Mexico and non-Asian countries, 14% on Europe, and 13% on Canada. The firms indicated they would pass cost increases to consumers over two years; non-importers felt tariffs would have little impact on prices and potentially lower their costs. The Cleveland Fed in April published results of a February survey of regional businesses. The firms largely expected that while tariffs would lead to higher input costs, higher selling prices, and lower demand, there would be no effect on employment -- a finding that also buttresses U.S. policymakers' willingness to keep interest rates on hold given a still, relatively strong, job market.
Free Malaysia Today
3 days ago
- Business
- Free Malaysia Today
Trump's tariff blitz prompts ‘firefighting' response from Fed researchers
The US Federal Reserve held its policy interest rate steady at a range of 4.25% to 4.5% at its last meeting. (File pic) WASHINGTON : US Federal Reserve (Fed) staffers have scrambled since January to decipher what Trump administration trade policies will mean for the economy, with published tallies of potential income losses, inflation estimates running as much as 2 percentage points higher, and breakdowns showing state-by-state winners and losers. The research papers and notes, at least a dozen and counting, have taken different approaches to estimate the implications of the still evolving trade war, which has pushed US import taxes to levels not seen in decades and, at times, to their highest since the Great Depression. Given the shifting administration announcements, with some of the stiffest tariffs now on hold, none stands out as a definitive take. However, the research effort has been systemwide and steady, reflecting the overarching role of trade policy in the national economic debate and in Fed deliberations over monetary policy. The Fed held its policy interest rate steady in the 4.25% to 4.5% range at its last meeting, with officials saying they are reluctant to change it until they know which way inflation and jobs will pivot. Minutes of that meeting will be released tomorrow and may provide more detail about how Fed staff and policymakers perceive the impact of the tariffs imposed so far. Fed governor Christopher Waller said in a May 14 speech the central bank is in 'firefighting' mode to understand what he has called 'one of the biggest shocks to affect the US economy in many decades' – an all hands effort to analyse a potential rewrite of the global trading system after decades of closer economic integration among nations. After Trump's April 2 tariff announcements proved larger and more extensive than anticipated, 'questions were asked of staff around the Federal Reserve system such as, 'What will this do to the US economy? What will happen to inflation and unemployment?,'' Waller said 'The answers to these questions are obviously time sensitive'. The ongoing research, Fed officials say, will be particularly useful once the final tariff rates and any retaliatory steps by other nations are in place. However, staff's initial findings and analysis may already be influencing the debate, generally undergirding Fed officials' topline conclusion that tariffs will raise prices paid by US households and lower purchasing power. Administration officials argue that the tariffs and trade details they will impose or negotiate will raise money for the US Treasury and boost US manufacturing jobs without sparking higher inflation. Inflation in focus Fed researchers have been particularly keen to understand how import taxes influence prices, a complex process that depends on things that shift in reaction to each other, like the willingness of producers or retailers to offset tariffs with lower profits, and the ability of consumers to pay more for imported goods, change what they buy, or forego some purchases altogether. A May note by Fed board economists estimated that the tariffs imposed on China in February and March had already added about a third of a percentage point to goods prices excluding food and energy in the first months of the year, and that but for the tariffs those prices would have fallen – a conclusion that helps explain why policymakers are reluctant to cut interest rates until they know more about inflation that may be in the pipeline. Larger tariffs have been put in place since that study was done, and even bigger ones are threatened. 'Once we start to get some clearer contours, I think that's the time to really start to use these models more robustly, ' Atlanta Fed president Raphael Bostic said in comments to reporters on May 20 in Florida. A Boston Fed study in February of general inflation and an Atlanta Fed study released the same month looking at everyday consumer items both saw prices moving higher, with the estimates depending on the tariffs used to make the estimates. The fact that the final level of tariffs remains in such flux is another factor keeping Fed officials on the sidelines. Trump has said there will be a baseline tariff of 10% on imports, but some of the paused tariffs exceed 100%, and unexpectedly on Friday the president said there would be a 50% tariff on all imports from the EU and a 25% levy on all imported iPhones. Consumption and income Along with rising prices Fed officials are concerned about how changes in trade policy may influence US economic growth if consumers, for example, are left with less purchasing power. The Dallas Fed in May highlighted one of the hurdles to sorting that out. The outcomes for the US economy depend heavily on whether other countries respond to Trump's tariffs with retaliatory levies on US exports. A 25% across-the-board tariff without retaliation could actually boost US consumption by around 0.5%, assuming that proceeds from the tariffs were funneled back to consumers, perhaps through tax cuts. The same tariffs with retaliation lead to an overall 1% decline in consumption, unevenly distributed across states with effects ranging from a 2.9% decline in Washington state to a 2.6% boost in Wyoming. As with any tax, tariff impacts vary from location to location based on the structure of the local company, with states that are exposed to global supply chains or whose citizens consume more imported goods likely to be hit harder than others. San Francisco Fed researchers, meanwhile, published a working paper in May that showed high tariffs and retaliation from other countries would lower inflation-adjusted income by 1% nationally, with the biggest hits felt in California, Texas, and the important political swing state of Michigan. Raise prices or fire workers? Along with quantitative studies, the Fed has fielded surveys to ask businesses how they may respond to rising tariffs, a staple issue also in conversations officials and staff are holding around the country to sense whether firms are primed to raise prices or fire workers. Boston Fed researchers, in a survey of small business tariff-related expectations conducted just before Trump took office, found that firms on average anticipated less-aggressive tariffs than actually seen, with 20% tariffs seen imposed on China, 15% on Mexico and non-Asian countries, 14% on Europe, and 13% on Canada. The firms indicated they would pass cost increases to consumers over two years; non-importers felt tariffs would have little impact on prices and potentially lower their costs. The Cleveland Fed in April published results of a February survey of regional businesses. The firms largely expected that while tariffs would lead to higher input costs, higher selling prices, and lower demand, there would be no effect on employment – a finding that also buttresses US policymakers' willingness to keep interest rates on hold given a still, relatively strong, job market.
Yahoo
3 days ago
- Business
- Yahoo
How Trump's big bill is shaking the bond market
House Republicans' domestic agenda bill doesn't have a topline cost estimate yet and faces the likelihood of major rewrites in the Senate, but it's already sending shockwaves through global financial markets. U.S. bonds have sold off in response to the House passage of the bill, which is likely to add trillions to a U.S. national deficit that has hovered around 120 percent of gross domestic product (GDP) since the pandemic. Both the 30-year and the 20-year U.S. Treasuries were trading on a yield above 5.1 percent on Thursday morning. For the 30-year, that's the highest level since 2007. The benchmark 10-year note was up above 4.6 percent, the highest level since February. Those high yields for U.S. bonds mean that investors want a bigger return for their public investments, which seem like less of a sure thing in the face of massive, deficit-expanding tax cuts. Preliminary estimates from the Congressional Budget Office (CBO) suggest the GOP bill could add $2.3 trillion to the deficit over ten years, though that number doesn't include interactions between the various tranches of budget cuts and tax cuts. Bankers and financiers are sounding notes of disappointment at the size of the budget cuts in the Republican bill, which are expected to kick 8.6 million people out of national health insurance programs and 3 million people off of food assistance programs. 'Everybody I've talked to in the financial markets, they're staring at the bill, and they thought it was going to be much more in terms of fiscal restraint, and they're not necessarily seeing it,' Federal Reserve Governor Christopher Waller said in a Thursday interview on Fox Business Network's 'Mornings with Maria' television program. 'Therefore, there's going to be a lot of issuance of Treasuries. And in order for them to buy these things, they want it at a lower price, and therefore, a higher yield,' he said. Investors told The Hill that they weren't all that surprised that the Republican bill would deliver substantial tax cuts, especially for top earners, without proportionate cuts to social services, which are politically unpopular and hard to pull off. The Senate could further walk back the spending cuts delivered by the House, which total roughly $1.5 trillion between the Energy and Commerce, Education, and Agriculture committees. What investors do think is remarkable is the macroeconomic effects of the tariffs, which are splitting up the traditional relationships between bonds, gold and the U.S. dollar. In the context of these larger fractures, the bond market selloff from the GOP bill could be more pronounced, they say. 'It's something I'm watching very closely,' Axel Merk, head of Merk Investments, told The Hill. 'Usually, higher long term yields would mean a stronger dollar and weaker gold, whereas instead we're seeing a weaker dollar and stronger gold.' 'Given the very significant deficits, [the fiscal policy] is something you can't ignore,' he added. The 20-year U.S. Treasury auction this week was another sore spot in the bond market and saw weak demand from investors. The Treasury sold $16 billion of new 20-year bonds at a yield of 5.05 percent – well above the average of the previous auctions at around 4.6 percent. Analysts for Deutsche Bank called the auction 'soft' and said it set off a stock market decline this week. 'The soft 20-year auction was also a trigger for a broader market slump, with the S&P 500 falling from negative 0.2 percent on [Tuesday] to negative 1.61 percent by the close, its worst day in the past month,' Jim Reid and others wrote for Deutsche Bank. Stocks have languished this week, with the Dow Jones Industrial Average and the S&P 500 index down about a percent since Monday Higher interest rates, both in the short term and the long term, make the cost of borrowing money higher — another factor compounding the financial drag from the GOP bill. The Fed has been cutting interest rates off of near-20-year highs prompted by pandemic shutdowns but has paused its cuts since December as economic conditions have wavered. Short term interest rates are now at about 4.3 percent, the highest level since November 2007 Fed Chair Jerome Powell has said that he thinks the days of near-zero interest rates, as was the case during the previous decade, might well be over. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Zawya
3 days ago
- Business
- Zawya
Trump's tariff blitz prompts 'firefighting' response from Fed researchers
U.S. Federal Reserve staffers have scrambled since January to decipher what Trump administration trade policies will mean for the economy, with published tallies of potential income losses, inflation estimates running as much as 2 percentage points higher, and breakdowns showing state-by-state winners and losers. The research papers and notes, at least a dozen and counting, have taken different approaches to estimate the implications of the still evolving trade war, which has pushed U.S. import taxes to levels not seen in decades and, at times, to their highest since the Great Depression. Given the shifting administration announcements, with some of the stiffest tariffs now on hold, none stands out as a definitive take. But the research effort has been systemwide and steady, reflecting the overarching role of trade policy in the national economic debate and in Fed deliberations over monetary policy. The Fed held its policy interest rate steady in the 4.25% to 4.5% range at its last meeting, with officials saying they are reluctant to change it until they know which way inflation and jobs will pivot. Minutes of that meeting will be released on Wednesday and may provide more detail about how Fed staff and policymakers perceive the impact of the tariffs imposed so far. Fed governor Christopher Waller said in a May 14 speech the central bank is in "firefighting" mode to understand what he has called "one of the biggest shocks to affect the U.S. economy in many decades" -- an all hands effort to analyze a potential rewrite of the global trading system after decades of closer economic integration among nations. After Trump's April 2 tariff announcements proved larger and more extensive than anticipated, "questions were asked of staff around the Federal Reserve system such as, 'What will this do to the U.S. economy? What will happen to inflation and unemployment?,'" Waller said "The answers to these questions are obviously time sensitive." The ongoing research, Fed officials say, will be particularly useful once the final tariff rates and any retaliatory steps by other nations are in place. But staff's initial findings and analysis may already be influencing the debate, generally undergirding Fed officials' topline conclusion that tariffs will raise prices paid by U.S. households and lower purchasing power. Administration officials argue that the tariffs and trade details they will impose or negotiate will raise money for the U.S. Treasury and boost U.S. manufacturing jobs without sparking higher inflation. INFLATION IN FOCUS Fed researchers have been particularly keen to understand how import taxes influence prices, a complex process that depends on things that shift in reaction to each other, like the willingness of producers or retailers to offset tariffs with lower profits, and the ability of consumers to pay more for imported goods, change what they buy, or forego some purchases altogether. A May note by Fed board economists estimated that the tariffs imposed on China in February and March had already added about a third of a percentage point to goods prices excluding food and energy in the first months of the year, and that but for the tariffs those prices would have fallen -- a conclusion that helps explain why policymakers are reluctant to cut interest rates until they know more about inflation that may be in the pipeline. Larger tariffs have been put in place since that study was done, and even bigger ones are threatened. "Once we start to get some clearer contours, I think that's the time to really start to use these models more robustly, " Atlanta Fed president Raphael Bostic said in comments to reporters on May 20 in Florida. A Boston Fed study in February of general inflation and an Atlanta Fed study released the same month looking at everyday consumer items both saw prices moving higher, with the estimates depending on the tariffs used to make the estimates. The fact that the final level of tariffs remains in such flux is another factor keeping Fed officials on the sidelines. Trump has said there will be a baseline tariff of 10% on imports, but some of the paused tariffs exceed 100%, and unexpectedly on Friday the president said there would be a 50% tariff on all imports from the European Union and a 25% levy on all imported iPhones. CONSUMPTION AND INCOME Along with rising prices Fed officials are concerned about how changes in trade policy may influence U.S. economic growth if consumers, for example, are left with less purchasing power. The Dallas Fed in May highlighted one of the hurdles to sorting that out. The outcomes for the U.S. economy depend heavily on whether other countries respond to Trump's tariffs with retaliatory levies on U.S. exports. A 25% across-the-board tariff without retaliation could actually boost U.S. consumption by around 0.5%, assuming that proceeds from the tariffs were funneled back to consumers, perhaps through tax cuts. The same tariffs with retaliation lead to an overall 1% decline in consumption, unevenly distributed across states with effects ranging from a 2.9% decline in Washington state to a 2.6% boost in Wyoming. As with any tax, tariff impacts vary from location to location based on the structure of the local company, with states that are exposed to global supply chains or whose citizens consume more imported goods likely to be hit harder than others. San Francisco Fed researchers, meanwhile, published a working paper in May that showed high tariffs and retaliation from other countries would lower inflation-adjusted income by 1% nationally, with the biggest hits felt in California, Texas, and the important political swing state of Michigan. RAISE PRICES OR FIRE WORKERS? Along with quantitative studies, the Fed has fielded surveys to ask businesses how they may respond to rising tariffs, a staple issue also in conversations officials and staff are holding around the country to sense whether firms are primed to raise prices or fire workers. Boston Fed researchers, in a survey of small business tariff-related expectations conducted just before Trump took office, found that firms on average anticipated less-aggressive tariffs than actually seen, with 20% tariffs seen imposed on China, 15% on Mexico and non-Asian countries, 14% on Europe, and 13% on Canada. The firms indicated they would pass cost increases to consumers over two years; non-importers felt tariffs would have little impact on prices and potentially lower their costs. The Cleveland Fed in April published results of a February survey of regional businesses. The firms largely expected that while tariffs would lead to higher input costs, higher selling prices, and lower demand, there would be no effect on employment -- a finding that also buttresses U.S. policymakers' willingness to keep interest rates on hold given a still, relatively strong, job market.
Reuters
3 days ago
- Business
- Reuters
Trump's tariff blitz prompts 'firefighting' response from Fed researchers
WASHINGTON/SAN FRANCISCO, May 27 (Reuters) - U.S. Federal Reserve staffers have scrambled since January to decipher what Trump administration trade policies will mean for the economy, with published tallies of potential income losses, inflation estimates running as much as 2 percentage points higher, and breakdowns showing state-by-state winners and losers. The research papers and notes, at least a dozen and counting, have taken different approaches to estimate the implications of the still evolving trade war, which has pushed U.S. import taxes to levels not seen in decades and, at times, to their highest since the Great Depression. Given the shifting administration announcements, with some of the stiffest tariffs now on hold, none stands out as a definitive take. But the research effort has been systemwide and steady, reflecting the overarching role of trade policy in the national economic debate and in Fed deliberations over monetary policy. The Fed held its policy interest rate steady in the 4.25% to 4.5% range at its last meeting, with officials saying they are reluctant to change it until they know which way inflation and jobs will pivot. Minutes of that meeting will be released on Wednesday and may provide more detail about how Fed staff and policymakers perceive the impact of the tariffs imposed so far. Fed governor Christopher Waller said in a May 14 speech the central bank is in "firefighting" mode to understand what he has called "one of the biggest shocks to affect the U.S. economy in many decades" -- an all hands effort to analyze a potential rewrite of the global trading system after decades of closer economic integration among nations. After Trump's April 2 tariff announcements proved larger and more extensive than anticipated, "questions were asked of staff around the Federal Reserve system such as, 'What will this do to the U.S. economy? What will happen to inflation and unemployment?,'" Waller said "The answers to these questions are obviously time sensitive." The ongoing research, Fed officials say, will be particularly useful once the final tariff rates and any retaliatory steps by other nations are in place. But staff's initial findings and analysis may already be influencing the debate, generally undergirding Fed officials' topline conclusion that tariffs will raise prices paid by U.S. households and lower purchasing power. Administration officials argue that the tariffs and trade details they will impose or negotiate will raise money for the U.S. Treasury and boost U.S. manufacturing jobs without sparking higher inflation. Fed researchers have been particularly keen to understand how import taxes influence prices, a complex process that depends on things that shift in reaction to each other, like the willingness of producers or retailers to offset tariffs with lower profits, and the ability of consumers to pay more for imported goods, change what they buy, or forego some purchases altogether. A May note by Fed board economists estimated that the tariffs imposed on China, opens new tab in February and March had already added about a third of a percentage point to goods prices excluding food and energy in the first months of the year, and that but for the tariffs those prices would have fallen -- a conclusion that helps explain why policymakers are reluctant to cut interest rates until they know more about inflation that may be in the pipeline. Larger tariffs have been put in place since that study was done, and even bigger ones are threatened. "Once we start to get some clearer contours, I think that's the time to really start to use these models more robustly, " Atlanta Fed president Raphael Bostic said in comments to reporters on May 20 in Florida. A Boston Fed study in February, opens new tabof general inflation and an Atlanta Fed study released the same month looking at everyday consumer items, opens new tabboth saw prices moving higher, with the estimates depending on the tariffs used to make the estimates. The fact that the final level of tariffs remains in such flux is another factor keeping Fed officials on the sidelines. Trump has said there will be a baseline tariff of 10% on imports, but some of the paused tariffs exceed 100%, and unexpectedly on Friday the president said there would be a 50% tariff on all imports from the European Union and a 25% levy on all imported iPhones. Along with rising prices Fed officials are concerned about how changes in trade policy may influence U.S. economic growth if consumers, for example, are left with less purchasing power. The Dallas Fed in May, opens new tab highlighted one of the hurdles to sorting that out. The outcomes for the U.S. economy depend heavily on whether other countries respond to Trump's tariffs with retaliatory levies on U.S. exports. A 25% across-the-board tariff without retaliation could actually boost U.S. consumption by around 0.5%, assuming that proceeds from the tariffs were funneled back to consumers, perhaps through tax cuts. The same tariffs with retaliation lead to an overall 1% decline in consumption, unevenly distributed across states with effects ranging from a 2.9% decline in Washington state to a 2.6% boost in Wyoming. As with any tax, tariff impacts vary from location to location based on the structure of the local company, with states that are exposed to global supply chains or whose citizens consume more imported goods likely to be hit harder than others. San Francisco Fed researchers, meanwhile, published a working paper in May, opens new tab that showed high tariffs and retaliation from other countries would lower inflation-adjusted income by 1% nationally, with the biggest hits felt in California, Texas, and the important political swing state of Michigan. Along with quantitative studies, the Fed has fielded surveys to ask businesses how they may respond to rising tariffs, a staple issue also in conversations officials and staff are holding around the country to sense whether firms are primed to raise prices or fire workers. Boston Fed researchers, in a survey of small business tariff-related expectations, opens new tab conducted just before Trump took office, found that firms on average anticipated less-aggressive tariffs than actually seen, with 20% tariffs seen imposed on China, 15% on Mexico and non-Asian countries, 14% on Europe, and 13% on Canada. The firms indicated they would pass cost increases to consumers over two years; non-importers felt tariffs would have little impact on prices and potentially lower their costs. The Cleveland Fed in April published results of a February survey of regional businesses. The firms largely expected that while tariffs would lead to higher input costs, higher selling prices, and lower demand, there would be no effect on employment, opens new tab -- a finding that also buttresses U.S. policymakers' willingness to keep interest rates on hold given a still, relatively strong, job market.
