Fed’s Goolsbee: Ignoring supply chain impacts, like tariffs, would be a mistake

• In inflation rises or progress stalls, the Fed will need to figure out if it’s from overheating or tariffs
• Distinguishing the cause of any inflation will be critical for deciding when or if the Fed should act
• Inflation has come down, is approaching 2% goal
• Covid pandemic experience shows supply chain impacts can have a material effect on inflation
• Opinions differ widely on how much tariffs would get passed into prices, suppliers may have to eat the cost

There’s nothing groundbreaking here but he makes a point worth pondering on supply chains, which remain far too fragile.

This article was written by Adam Button at www.forexlive.com.