‘PRETTY NERVOUS': Fed official explains the warning flags for inflation

Tariffs Impact on Home Renovation Costs - President Trump has announced new tariffs, including a 10% levy on imported softwood lumber and a 25% duty on kitchen cabinets, bathroom vanities, and upholstered furniture manufactured outside the U.S. These tariffs will take effect on October 14th [1] Market Reactions to Tariffs - Lumber stocks such as Universal Forest Products and West Frasier Timber have seen slight increases, while cabinet manufacturers like Master Brand and American Woodmark Corporation, as well as Lazy Boy, have experienced declines, with Master Brand down 3% [2][3] - Notably, stocks like William Sonoma and RH, which dropped when tariffs were hinted at, have rebounded and are up today [3] Federal Reserve's Economic Outlook - The Federal Reserve is facing challenges in making decisions on interest rates due to potential government shutdowns affecting the release of key economic data, including jobs and inflation reports [5][6] - Chicago Fed President Austin Goulby emphasized the importance of data from the Bureau of Labor Statistics for understanding economic transitions and making informed decisions [6][8] Inflation Concerns - Goulby noted that inflation has been above the 2% target for over four years, complicating the Fed's outlook and making it difficult to predict future rate cuts [11][21] - The increase in inflation, particularly from tariffs, raises concerns about the persistence of inflationary pressures, which could impact the Fed's credibility if interest rates are cut while inflation remains high [22][20]