Report on US Economic Growth and the Impact of Import Tariffs
According to Jinshi's assessment, broadcast on April 9, Mr. Musallem from the Fed predicts that US economic growth is likely to significantly decline below the trend this year. The reason is believed to stem from businesses and households adjusting to price increases due to new import tariffs. Economic growth is estimated to be around 2%.
Mr. Musallem did not make an official recession prediction, but emphasized that "risks in both directions are becoming a reality" as higher-than-expected tariffs drive up prices. This, along with declining confidence and a sharp stock market decline, could reduce spending and negatively impact household assets.
Price balance and inflation pressures are likely to slow economic growth. This year, Mr. Musallem has the right to vote on interest rate policy and confirms that monetary policy response will depend on inflation and unemployment developments in the coming months. He will monitor whether price shocks will persist and whether inflation expectations align with the Fed's 2% inflation target.
