In an exclusive interview with FOX Business, Edward Lawrence, President of the Federal Reserve Bank of San Francisco, Mary Daly talks about the next rate decisions, keeping the economy “in good shape” and the potential consequences of a second Trump administration.
As the future of the US economy comes to the fore as 2024 quickly draws to a close, the president of the Federal Reserve Bank of San Francisco detailed what Trump’s decisions on tariffs and rates could mean for markets.
In an exclusive interview Tuesday with FOX Business’s Edward Lawrence, Mary Daly was blunt about what could happen if 10% tariffs are imposed on goods imported through the Port of Los Angeles.
“It really depends,” Daley said on the live broadcast “Kavuto: Coast to Coast.” “That’s why we at the Fed don’t think hypothetically, because the economy is a complex and big thing.”
“It depends on what is being charged, how does it happen, will the firms in the US adjust it? What other players in the global economy can substitute their goods for goods coming from another country?’ Next up was Daley. “So we’ve had trade issues and tariffs before, and the economy adjusts, and that doesn’t usually dampen growth.”
FED-GUIDED INFLATION TIPS PRICES TO RISE IN OCTOBER
Last week, President-elect Donald Trump said he would issue an order upon taking office, would impose 25% tariffs on all products entering the US from Mexico and Canada, and additional tariff increases on China due to the influx of illegal immigrants and illicit drugs.
“We’ve had trade issues and tariffs before, and the economy adjusts, and that usually doesn’t hurt growth,” Mary Daly told FOX Business’ Edward Lawrence. (Getty Images)
In a follow-up post by Truth Social, Trump added that he would impose additional 10% tariffs on all Chinese goods imported into the US due to the “tremendous amount” of drugs, particularly fentanyl, being smuggled into the country.
Daley clarified that the Fed does not have a rate forecast model because it falls under the “hypothetical” category.
Lonski Group President John Lonski discusses investor concerns that Trump’s tariffs will trigger inflation on “Maria Bartirama’s Wall Street.”
“We know historically how tariffs affect the economy. There is a lot of work. Therefore, we are very prepared to assess the situation. But the president-elect hasn’t even taken office yet,” said President San Fran.
“And I think it’s the right thing to do to give him and his team the opportunity to come up with a policy before we react.”
When it comes to macroeconomics, Daly expressed of the central bank the belief that it is “in a very good place”, although the December rate cut has not been fully reversed.
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Federal Reserve Bank of Chicago President Austin Goolsby talks about the impact of the Federal Reserve’s actions on the Klaman Countdown.
“In order to keep the economy in good shape, we must continue to recalibrate policy,” Daly noted.
“Now, whether it’s in December or later, that’s a matter we’ll have an opportunity to discuss and discuss at our next meeting. But the point is that we have to continue to move policy downwards to accommodate the economy because we want a sustained expansion with low inflation.”
FOX Business’ Breck Dumas contributed to this report.
