At an economics lecture at Washington and Lee University, Richmond Fed President Barkin used the metaphor of "thick fog" on Thursday (March 27) to describe the current exceptionally complex policy environment, emphasizing that high uncertainty is suppressing demand from businesses and consumers. He pointed out that the current "moderately restrictive" monetary policy of the Federal Reserve is in a favorable position for flexible response, but warned that the Trump administration's rapidly changing policies such as tariffs and taxes are creating a decision-making dilemma of "zero visibility".

1. Tariff policies impact economic expectations

Although Barkin did not directly comment on Trump's 25% car tariff, he acknowledged that the new government's tariff measures may push up inflation, while emphasizing that their impact may be offset by future regulatory policies. He admitted that the final level of tariff rates, the reactions of various countries and markets are all unknown, and although the direction of policies such as immigration and taxation can be foreseen, the "net impact is still shrouded in mist".

2. Uncertainty freezes market momentum

This is not an ordinary fog, it is a thick fog that requires parking on the side of the road and driving a double flash, "Balkin used metaphor to describe the erosion of confidence caused by policy changes. He pointed out that businesses and consumers have postponed spending and investment due to the inability to predict policy consequences, and credit and stock markets also need stability support, while the current environment 'low mood may continue to suppress demand'.

3. The Federal Reserve's "double flash" defense posture

Faced with a strong labor market and excessive inflation, Barkin believes that a "moderate restraint stance" is a reasonable choice. He also released a signal of flexibility: 'If the situation changes, we are ready to adjust,' implying that the Federal Reserve will be like a vehicle flashing in thick fog, both on alert and ready to start at any time.

【 Summary 】

Barkin's speech revealed the dilemma of monetary policy makers in the new normal: they need to hedge against the chain reaction of policy blitzkrieg while avoiding excessive intervention that could stifle economic resilience. Its' fog theory 'is not only a sharp portrayal of policy uncertainty in the Trump era, but also highlights the Fed's tactical thinking of using static brakes - maintaining strategic patience in the eyes of storms may be the most dangerous balancing art at present.