Fed: Higher risk of trade war is a retraction of consumer spending

Richmond’s Federal Reserve President Thomas Barkin said on Wednesday that the biggest risk he is observing is a retraction in consumer spending, most of the US economy, which has not occurred so far, even with the fall of actions amid concern for the effect of American tariffs and the climbing of trade war.

“People are reducing air trips, but we haven’t heard that about what I call daily spending yet… This will be a sign when you start talking to companies that say ‘man, traffic just dried’ – you haven’t heard it yet,” Barkin told Washington DC Economic Club.

“A corresponding to the stock market is not what leads to a consumer retraction. It’s a kind of widespread conviction that things are going downhill.”