Fed's Barr Says Supply Chain Disruptions Could Boost Inflation
Federal Reserve Governor Michael Barr said the economy is on solid ground, but warned tariff-related supply-chain disruptions could lead to lower growth and higher inflation.
Barr emphasized the importance of small businesses and their role in both supply chains and the overall economy. Trade policies, he said, have clouded the outlook and increased uncertainty.
He said potential supply chain disruptions are “particularly acute” for small businesses, in part because they have less access to credit. Small businesses often provide specialized inputs not easily sourced elsewhere, he added, and business failures could further disrupt supply chains.
“As we saw during the pandemic, such disruptions can have large and lasting effects on prices, as well as output,” Barr said in remarks prepared for a New York Fed event Thursday. “If these disruptions were to occur, we’d likely see lower growth and higher inflation ahead.”
Source : Bloomberg
