Bloomberg Talks Former Fed President Eric Rosengren Talks Tariffs, Inflation
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Apr 4, 2025 Former Boston Fed President Eric Rosengren dives into the effects of Trump-era tariffs on interest rates and inflation. He discusses how these trade policies create uncertainty in economic forecasts. The conversation also highlights the Fed's strategies for addressing rising inflation and unemployment challenges, revealing the delicate balance policymakers must maintain. Eric shares insights on navigating these complex economic waters alongside Bloomberg's Jonathan Ferro.
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Fed's Challenge
- The Federal Reserve faces a difficult environment due to tariffs and potential retaliation.
- The Fed's response depends on whether these tariffs are a temporary negotiating tool or a permanent policy change.
Impact of Permanent Tariffs
- If tariffs become permanent, both unemployment and inflation will rise.
- Inflation will likely show the effects of tariffs sooner than the unemployment rate.
Fed's Reluctance
- The Fed is hesitant to act quickly due to policy uncertainty and initial inflationary pressures from tariffs.
- They will react if a global recession significantly increases US unemployment.