BlockBeats news, on May 9, Federal Reserve's Barr said that Trump's trade policy could raise inflation, lower economic growth, and increase unemployment later this year, which could put policymakers in a tricky position about which issue to address. Barr stated, "The scale and scope of recent tariff increases are unprecedented, and we do not know their final form; it is too early to say how they will affect the economy."
However, he noted that the risks are evident. "In my view, higher tariffs could disrupt global supply chains and exert continued upward pressure on inflation," he also pointed out that businesses need time to adjust their distribution networks. Some suppliers, particularly small businesses, may not be able to adapt quickly enough and could go out of business, exacerbating the chaos in the supply chain. Barr said, "I am equally concerned that as the economy slows down, tariffs will lead to an increase in unemployment. Therefore, if we see both inflation and unemployment rising simultaneously, the Federal Reserve may find itself in a bind." (Jin Ten)
