Part 10/16:
Paul Sheer, former chief economist at Standard and Posh, offered a nuanced view of monetary policy amidst tariffs and trade tensions. He discussed the complex relationship between Trump’s trade policies and the Federal Reserve’s cautious stance. Despite calls from policymakers and the administration, the Fed remains hesitant to cut interest rates further, citing residual inflationary pressures and the risk of upward price pressures from tariffs.
Sheer emphasized that while Trump views tariffs as a means to reduce the national debt and promote manufacturing, the real challenge lies in managing inflation and maintaining financial stability. The interplay between fiscal stimulus via tariffs and monetary policy is delicate, with potential long-term impacts on inflation expectations.