Optimistic Economy Faded due to Trade Tensions, says Bostic

Atlanta Fed President Raphael Bostic told on Monday that fears on potential trade conflict will weaken growth of above-trend economic performance. During the time when the majority of the economists extensively increased their GDP outlooks in the second quarter, Bostic warned about the possible loss of enthusiasm.

The US government is battling against China along with other trading partners and President Donald Trump strive to lessen the difference between exports and imports. Furthermore, the administration imposed tariffs on imported steel and aluminum and other plenty of prospects while China continues to strike back. Also, Trump warned that he will pull out the United States from NAFTA in terms of unilateral agreements.

The increasing fears in trade caused the financial markets to become volatile and Bostic mentioned that the tension affects the larger economy. The central bank official also stated that he is in favor with the 0.25 percentage point interest rate hike approved by the Federal Open Market Committee (FOMC) last week, but he was uncertain about the future course of the increase.

The GDPNow economic tracker by the Atlanta Fed showed an estimate of 4.8 percent growth for April- June quarter.