Federal Reserve Bank of Chicago President Austan Goolsbee said persistent, outsize tariffs could renew supply-chain disruptions and drive up inflation.

Trade wars could lead to supply-chain disruptions and an inflation spike similar to the early pandemic, Austan Goolsbee said.

Federal Reserve officials take great pains not to comment on fiscal policy, but the looming threat from tariffs is forcing their hand.

One area of concern for the U.S. economy is that big businesses may be pulling back from making new investments given the uncertainty surrounding the economic policies of the Trump administration, Richmond Fed President Tom Barkin said on Wednesday.

The U.S. Federal Reserve is still leaning toward further rate cuts this year, although uncertainty about the impact of new Trump administration initiatives on things like tariffs, immigration and regulations will need to be better understood,