In a downturn, it would also be important for fiscal policy to support the economy. However, as noted in the Congressional Budget Office's recent long-term budget outlook, the Federal budget is on an unsustainable path with high and rising debt.
Powell highlights the need for fiscal policy support amid rising national debt.
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Tariffs this year are likely to push up prices and weigh on economic activity.
As long as the economy is in solid shape, we think the prudent thing to do is to wait and see what those effects might be.
If we're going to do that successfully, we need to do it in a completely nonpolitical way, which means we don't take sides, we don't play one side against the other, we stay out of issues that are really not our bailiwick.
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