Federal Reserve member Barkan: I expect a 0.4% increase in inflation due to tariffs.

In a media interview on Wednesday, Thomas Barkin, a member of the Federal Reserve Bank of Richmond, discussed tariffs and their potential impact on the U.S. economy and inflation. Barkin's most important comments today were:

• There are three levels of uncertainty regarding tariffs; the first is the rates each country will impose, the second is the response from countries and companies, and the third is how all of this will affect the end consumer.
• Ultimately, it is the end consumer who bears the cost of tariffs.
• There is a wide range of outcomes associated with tariffs, and it cannot be confined at this time.
• It is useful to look at the experience of tariffs in 2018 and 2019.
• Most studies indicate that companies realized 30 to 40 basis points of inflation in 2018 and 2019, even though inflation was more subdued at that time.
• What happened afterward was that consumers continued to spend, and companies continued to hire, but large companies reduced their investments.
• I expect at least a 30 to 40 basis point increase in inflation rates could result from tariffs, based on the previous experience in 2018 and 2019.
• We have not heard CEOs talking about a potential recession despite the anticipated tariffs.
• The baseline for the U.S. economy is still in a very healthy position.
• The Federal Reserve is under constant cyber attack.
• We cannot rely solely on existing security protocols.
• Globalization has been deflationary for the world economy.
• Some fear that the retreat of globalization could act as a headwind to growth in the United States.