The threat of a trade war poses risks to what is an otherwise robust growth picture, Cleveland Fed President Loretta Mester said Monday.
Despite the "uncertainty" risks from White House tariffs on steel and aluminum and punitive measures taken against China, Mester said she remains optimistic about the economy.
"This uncertainty may not be resolved quickly," Mester said during a speech in Princeton, New Jersey. "Assessing the impact on the U.S. macroeconomy will ultimately depend on how other countries react, including whether they impose their own tariffs or other trade barriers in response."
Indeed, President Donald Trump's tariffs have injected uncertainty not only in the global trade picture but also financial markets. Stocks have been volatile lately, with Monday trading showing a sharp rebound from a Friday plunge.