Fed’s Barkin: Baseline data has been favourable

• It’s difficult to know the impact of tariffs.
• Looking forward it’s hard to know what specific tariffs are coming.
• Uncertainty goes beyond tariffs to immigration, regulation and other issues.
• Many Trump policies adding to uncertainty in economy.
• I see strong consumer spending and lower investment in 2025.
• I expect 12 month inflation numbers to come down nicely.
• I still lean towards cuts this year.
• Would never take any policy move off the table, but hikes would require an economy overheating.
• I see no sign of the US economy overheating.
• The bias is to see what happens and then react to it.
• Still think policy rate is modestly restrictive.
• We have recalibrated to a place that is more sensible to where the economy is now.

This article was written by Giuseppe Dellamotta at www.forexlive.com.