Fed's Barr: Policy in a good position to adjust as conditions unfold

Federal Reserve Governor Michael Barr said on Friday that the monetary policy is in a good position to adjust as conditions unfold, per Reuters.

Key takeaways

"Economic outlook clouded by trade policies that have increased uncertainty, hurt consumer and business sentiment."

"Tariffs to lead to higher us inflation, lower growth in both us and abroad, starting later this year."

"Fed may be in difficult position if both inflation and unemployment rise."

"Equally concerned tariffs will lead to higher unemployment as economy slows."

"Tariffs could create persistent upward pressure on inflation by disrupting supply chains."

"Artificial intelligence may require policymakers to reassess the natural rate of unemployment."

"Too soon to know how tariffs will affect economy."

"As of first quarter, disinflation on gradual but uneven path toward 2%, economy resilient."

"AI may also increase the neutral interest rate."

Market reaction

The US Dollar (USD) Index stays under modest bearish pressure and was last seen losing 0.17% on the day at 100.45.