Tariff's Impact on the Fed's policy
I have come across an interesting article here from ing. on the impact of the US's 10% tariff's on Chinese imports and the knock on to the US's inflation and growth.
Growth
- Supply chain disruption
- Higher costs
- General inactivity through uncertainty (lack of investment and hiring)
- Add the tariff's to higher interest rates, strong dollar and EM fear and that could weigh on US GDP growth to 2% in 2019-2020
Inflation - You need to read the article to get all the qualifications and caveats, however,
- 0.2% increase over 12 months if tariffs stay as they are (10%)
- 4Q18 may see a 0.4-0.5% increase if tariffs raised on all imports (not currently the case)
