U S of A: Update

Let me lay it out for you in the simplest way possible: the Fed is trying to keep its cool while dealing with all the crazy stuff coming out of the White House. Since Trump got back into office, he has been throwing around threats of big tariffs, promising to slash taxes, and talking about kicking out a lot of undocumented folks. Everybody is freaked that this will light a fire under prices and juice inflation, but Trump and his advisors are all like, nah that is just a way to flex on other countries and get a better deal for the US.

Over at the Chicago Fed, Austan Goolsbee says they are on guard to keep inflation on track for that two percent sweet spot and the plan is to adapt to whatever happens in Washington. But he also says if inflation pops off, the Fed has to figure out whether it is actual overheating of the economy or just some weird temporary crap in the supply chain. That is easier said than done because you have to dig into every little detail and separate the real threats from the passing noise.