Economists and financiers can deal with risk. What they cannot deal with is uncertainty.
The former gives you at least a rough percentage chance of what might happen, while the latter case means that you have no idea what would happen.
An example of uncertainty would be a if we had an impulsive, petulant, narcissistic, and possibly senile person running US trade policy, for example.
It's a good thing that we don't have THAT in the United States, otherwise, the Federal Reserve might look at this uncertainty and hold off on rate cuts.
Oh, wait, the Fed did look at this uncertainty and hold off on rate cuts.
Funny, innit?
Federal Reserve Chair Jerome Powell projected confidence when he insisted the central bank was in a good position to handle whatever the economy does next—all while repeatedly acknowledging the Fed has little idea what’s actually coming.
The Fed is trying to see how the dust will settle from the aftereffects of President Trump’s April 2 “Liberation Day” tariff announcements, among other policy changes. Most economists expect tariffs to lift prices over the coming months, and that is a worry for the Fed because officials still don’t feel as if they completely vanquished inflation after a three-year-long fight.
“We haven’t been through a situation like this, and I think we have to be humble about our ability to forecast it,” Powell said.
Inflation has eased recently, but tariff effects loom. The job market shows hints of softness, though unemployment remains low at 4.2%.
We are f%$#ed.
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