Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said a fast resolution between the Trump administration and countries with tariffs will help ease the fear of a recession.
Kashkari joined CBS News’s “Face the Nation” on Sunday, where he was asked about the increasing odds of a recession after the administration slapped "reciprocal" tariffs on allies and adversaries alike.
“JPMorgan CEO Jamie Dimon said the odds of a recession are to 50-50, Goldman Sachs says 45 percent chance of recession, is the risk that high in your estimate?” host Margaret Brennan asked.
“It’s really going to be determined by, are there quick resolutions?” Kashkari replied. “Are there quick resolutions to these trade uncertainties with our major trading partners?”
“The faster those resolutions come, I think more ... confidence can be restored and hopefully those odds can be brought down,” he continued.
Still, Kashkari warned it’s a “serious situation” that he said was volatile.
The uncertainty comes just days after Trump walked back most tariffs on various countries, leveling it out at 10 percent per country. China, however, was increased to a 125 percent tariff on its goods, and it retaliated with its own increase on U.S. goods.
The situation has plunged the U.S. into a trade war as countries look to strike a deal with the Trump administration over exemptions to tariffs.
Kashkari warned that if businesses and consumers get nervous and pull back, it could lead to economic downturn, regardless of the tariffs.
“There’s a lot to try to unwrap right now, and we’re doing our best to try to keep our arms around it,” he said.
