One of the most influential economists in the country says just the thought of tariffs - whether they actually happen or not - is doing a number on the American psyche.
Not exactly what you want to hear from the President of the Federal Reserve Bank of Minneapolis, Neel Kashkari.
"It's conceivable that the hit to confidence could be a bigger effect than the tariffs themselves. So that's makes me nervous," says Kashkari, speaking to the Detroit Lakes, Minnesota Chamber of Commerce this week.
However, he says most of it has to do with uncertainty and that uncertainty should be short-lived.
"That hit to confidence could be restored quickly if there are resolutions of these trade uncertainties right now," Kashkari explains. "So if there are agreements between the United States and our major trading partners, then confidence in theory could be restored quickly."
Kashkari says the shift in consumer confidence right now is the most dramatic he's seen since COVID hit in March of 2020.
"I've been at the Fed for 10 years, and this is the most dramatic shift in confidence that I can recall since COVID," he says.
President Donald Trump on Wednesday, in the latest news on tarffis, said he was placing 25% tariffs on auto imports. That's a move that the White House claims would foster domestic manufacturing but could also put a financial squeeze on automakers that depend on global supply chains.
The tariffs could be complicated as even U.S. automakers source their components from around the world, meaning that they could face higher costs and lower sales. Shares in General Motors have fallen roughly 3% in Wednesday afternoon trading. Ford’s stock was up slightly. Shares in Stellantis, the owner of Jeep and Chrysler, have dropped nearly 4%.
Automakers say they could face higher costs and lower sales. Shares in General Motors fell roughly 3% in Wednesday afternoon trading. Ford’s stock was up slightly. Shares in Stellantis, the owner of Jeep and Chrysler, have dropped nearly 4%.