As Trump Stokes Uncertainty, the Fed Asks Businesses Where It Hurts
The New York Times
The central bank’s outreach to companies has taken on new significance as the outlook for growth and inflation gets cloudier.
Chris Bergen, who runs a commercial greenhouse business in northern Minnesota, finds himself “walking a tightrope” roughly two months into President Trump’s second term. Acute uncertainty about how the administration’s trade and immigration policies will unfold and affect the economy has made him much more cautious about any expansion plans.
As one of the country’s biggest producers of bedding plants, perennials and other flowers, Bergen’s Greenhouses is exposed on many fronts.
Every June, it trucks in more than six million pounds of peat moss from Manitoba. Suppliers have stopped quoting prices until they have more clarity on tariffs. The plastic flower pots that Mr. Bergen imports from China could also wind up costing more if tariffs remain in place, squeezing already “razor-thin margins,” he said. He is also worried about needing to find workers if Mr. Trump, as part of an immigration crackdown, ends a program that provides temporary visas to many of the company’s agricultural workers.
“We’re not putting our foot on the brake, but we are taking our foot off the gas,” said Mr. Bergen, whose family has run the business for over a century.
That caution is one of the biggest concerns for the Federal Reserve, which is facing an increasingly challenging economic moment with little precedent. The central bank is trying to get a better read on the economy as it debates when — or if — it can again lower interest rates with inflation still too high for its liking. Businesses are warning of both higher prices and slower growth, effects that have yet to show up entirely in the economic data.
The 12 regional presidents at the central bank have always kept close tabs on businesses in their districts in order to understand how economic conditions are evolving. That local outreach has taken on new significance as the range of possible outcomes has widened drastically.
