Tremendous uncertainty weighs on economic activity

Federal Reserve (Fed) Bank of Cleveland President Beth Hammack noted during an interview with Axios that still-brewing US government policies continue to make it increasingly difficult for policymakers to manage the economy. Left unchecked, Hammack sees rising odds of a stagflation scenario, where low growth is coupled with high inflation.

Key highlights

Tremendous uncertainty weighs on economic activity.

Policies to come could offset trade policy effect.

Hammack sees stagflationary outcome as a likely scenario.

I don’t want to overreact to trade.

White House tax bill complicates forecast.