Jeffrey Schmid, President of the Kansas City Federal Reserve http://www.swfedfed.org/, provided a useful perspective on the stormy economy. In particular, he underscored the negative effects of the ongoing tariff fight. In his latest comments, Schmid pointed to the still-record high amount of uncertainty. He emphasized that this uncertainty is hurting businesses and consumers. He stressed the importance of clear and predictable trade policies to support a stronger overall economic climate.
During his remarks, Schmid noted that ongoing tariff discussions have resulted in a level of uncertainty. In turn, businesses are understandably apprehensive to make long-term investments or hiring decisions given the threat of tariff increases or other shifts in trade policy. This reluctance contributes to weaker economic growth and reduced consumer confidence.
The Kansas City Fed President announced these statements at the recent High-Level Economic Conference hosted in Kansas City by his Federal Reserve district. He said although the economy continues to prove its resilience, the ongoing uncertainty because of tariffs is still one of the largest obstacles. Schmid echoed that clarity in trade negotiations would be key to easing these fears and fostering more economic growth and stability.
Schmid’s comments are particularly prescient, occurring just as economists around the country are watching and studying how tariffs impact domestic markets. He drilled in the point that the current tariff debate is driving inflation in a big way. It drives our pricing strategies and patterns of overall consumer spending. The ripple effects of these uncertainties have been felt in nearly every sector, making recovery even more challenging in our new post-pandemic economy.
Alongside discussions of tariffs, Schmid made it clear just how important these tariffs were. He further looked at other factors contributing to economic uncertainty, including supply chain issues and shifts in consumer patterns. More importantly, he directly acknowledged that companies are still looking for stronger signals from all levels of government before taking the plunge on big investments.