Federal Reserve Bank of Minneapolis President Neel Kashkari said he was "sympathetic" to the need to press China for fair trade, but stressed that it was too early to assess the impact of the US Estimate China trade on the economy. China has been pursuing a one-sided trade policy for many years, Kashkari said on Saturday in an interview with Neil Cavuto on Fox News Channel. "We should all pay attention to the tariff threats that are being exchanged, given the wide range of possible outcomes."
Kashkari spoke a few days after President Donald Trump ordered the US Trade Representative's office to consider tariffs on additional Chinese imports of $ 100 billion, bringing the range of Chinese goods to $ 150 billion Dollar amounts. China, which proposed US $ 50 billion in tariffs on US goods, including airplanes and soybeans, after the first US overthrow, said it would respond proportionately.
"That could be a lot of breast hammers" and no real impact on the economy, or "it could lead to a trade war," Kashkari said. The bottom line could also be in the middle of a lot of noise, but it scares businesses and investors, "and they pull back, and that could affect the growth of the US economy," he said. "The impact on Main Street will be seen in the long term."
Risks for Farmers
Some Fed officials have recently warned that the brewing conflict will unsettle the otherwise solid US economic outlook. It's too soon to judge the fallout. Fed Chairman Jerome Powell tried to stay away from the subject on Friday, and his prepared comments in a speech in Chicago contained no clue to China or the financial markets that feared that the threats could escalate, A US-China Trade War Was Shattered
"We at the Federal Reserve are attentive, but it's too early for any of us to judge," Kashkari said. "None of us knows how to weigh the likelihood of these different outcomes."
Agricultural prices have been low for some time in the Kashkari Fed district, the Minnesota, the third largest US soybean-growing state, as well as the Dakotas, Montana and parts of Wisconsin and Michigan. As trade friction further lowers prices, this could lead to greater consolidation of ownership and influence the banks lending to these producers.
Kashkari also said that it is difficult to estimate the impact on consumer prices. Tariffs could offer some relief in the short term, even though they would also increase import prices, he said. "As expressed in headline inflation, I think it's hard to judge," Kashkari said. "This uncertainty scares people a bit."