Federal Reserve Goolsbee: Tariffs could trigger a double contraction in consumer investment

Mr. Goolsbee said the economy would be thrown into disarray if consumers stopped spending because of uncertainty or businesses halted investment. In theory, the impact of tariffs on prices should be temporary, but given factors such as retaliatory tariffs and levies on intermediate goods, the actual impact could be more lasting.
Mr. Goolsby emphasised that while surveys showed business and consumer confidence had "almost bottomed out", physical data still pointed to solid US economic growth. He maintained his previous judgment that interest rates would be cut over the next 12 to 18 months.