Fed’s Goolsbee warns of summer slowdown after pre-tariff inventory surge

Goolsbee warns of potential summer slump amid pre-tariff economic surge

Businesses and consumers accelerate purchases ahead of delayed tariffs

The U.S. economy may experience a short-term boost followed by a noticeable slowdown this summer due to anticipatory purchasing driven by upcoming trade tariffs, according to Chicago Federal Reserve President Austan Goolsbee.

In an interview with CBS News’ “Face the Nation” on Sunday, Goolsbee described current economic activity as “artificially high,” attributing the surge to businesses and consumers stockpiling goods in advance of the Trump administration’s announced tariffs.

Auto sector among the most proactive in inventory buildup

Goolsbee emphasized that this pattern is particularly evident in sectors heavily reliant on imports, such as automotive manufacturing. Companies are accelerating purchases of foreign components to avoid the cost impact of the pending tariffs.

“We’ve heard a lot about preemptive building up of inventories that could last 60 to 90 days,” Goolsbee said. “That activity might look artificially high at first and then decline by summer, as businesses and consumers have already front-loaded their buying.”

Tariffs exceed expectations, fueling uncertainty

The tariffs, initially announced by former President Donald Trump on April 2 and subsequently paused for 90 days, came as a surprise to many business leaders in terms of their scope and scale. Goolsbee highlighted that many executives are concerned about the potential disruption the duties could cause across supply chains.

While the administration has signaled ongoing trade negotiations with countries including China, Japan, Mexico, and the European Union, the outlook remains unclear.

“There’s just a lot of question marks,” Goolsbee said. “Ninety days from now, we don’t know how big the tariffs will actually be.”

Fed independence remains a priority amid political pressure

In parallel with the trade tensions, Goolsbee addressed recent political pressure directed at the Federal Reserve. Last week, former President Trump renewed calls for the Fed to lower interest rates and reignited speculation about removing Fed Chair Jerome Powell.

Goolsbee responded with a strong defense of central bank independence. “I strongly hope that we do not move into an environment where monetary independence is questioned,” he said. “That would undermine the credibility of the Fed.”

As uncertainty over trade policy and monetary direction grows, economists and business leaders will be watching closely for signs of a post-surge slowdown.

Stay tuned to The Horizons Times for the latest updates on the U.S. economy and Federal Reserve policy.