Talk of a trade war ignites uncertainty and is against the interest of the US, Fed officials said


Global worries over an emerging “trade war” pose an uncertainty for the Federal Reserve, officials said Wednesday.

The threat to apply punitive tariffs on steel and aluminum imports pose an uncertainty for the Fed, Fed Governor Lael Brainard, among the most influential U.S. central bankers, said when asked at a dinner speech about talk of trade wars

She added, though, that it is too early to determine what will come of all the talk.

“There may be some uncertainty associated with possible developments in this area because it’s early to tell what the broader implications could be.”

“I see it as an uncertainty but not something that would materially change my outlook today,” she added.

Separately, Dallas Fed President Robert Kaplan said in Houston that anything that would hurt relationships with trading partners such as Mexico and Canada would be against the interest of the U.S., even as he declined to directly comment on President Donald Trump’s threat to impose tariffs on steel and aluminum imports.

“My sensitivity would be, any actions we could take as a country to jeopardize those relationships are not in our interest,” he said.

Asked if he would change his forecast to reflect any expected impact from the tariffs, Kaplan said no.

“It’s still too soon to say what policies are going to be implemented — my job is not to analyze or overly comment on hypotheticals,” he said.

CNBC contributed to this report.

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