Fed's Barr: Supply Chain Disruptions May Lead to Rising Inflation

Federal Reserve's Barr stated that the U.S. economic foundation is solid, but he warned that supply chain disruptions related to tariffs could lead to slower economic growth and rising inflation. Barr emphasized the importance of small businesses and their role in the supply chain and the overall economy. He noted that trade policy has cast a shadow over the outlook, increasing uncertainty. For small businesses, potential supply chain disruptions are "particularly severe," partly because they have fewer opportunities to access credit. He added that small businesses often provide specialized inputs that are not easily obtainable elsewhere, and business closures could further disrupt the supply chain.