Bloomberg reported that the Federal Reserve Bank of Atlanta’s President Raphael Bostic who is also a member of the Federal Reserve’s Open Market Committee (FOMC) has become less optimistic about the U.S. economy. This is due to concerns by the business community that U.S. trade barriers will disrupt growth and increase the risks for an economic downturn.
President Bostic’s comments from a speech that he gave in Savannah Georgia as reported by Bloomberg:
- “I began the year with a decided upside tilt to my risk profile for growth, reflecting business optimism following the passage of tax reform”.
- “That optimism has almost completely faded among my contacts, replaced by concerns about trade policy and tariffs. Perceived uncertainty has risen markedly. While projects under way continue, the bar for new investment is currently quite high,”
Bostic said the current economy reflects a tight labor market and that inflation was near the Fed’s 2% goal. The open market committee member’s comments further support my argument that the probability of a recession beginning before the major US stock market indices make a new all-time high has increased considerably.
Full article entitled “Fed’s Bostic Says Business Optimism Is Fading While Trade Tensions Rise”, available at Bloomberg June 19, 2018.