Via Alliance Bernstein:
The Politics of “Tariffs” & The Fed
The Trump administration used the hammer of tariffs to negotiate a bi-lateral trade agreement with China, but in doing so also influenced a change in domestic monetary policy. The tariff-led negotiations were part of Trump’s team trade strategy, but were the tariffs also a tool to persuade a change in monetary policy? Whether it was or not, the Fed has now unwittingly entered into symbiotic relationship with fiscal policy and questions over autonomy could very well influence future policy decisions jeopardizing financial stability in the process.
