Fed Reserve Governor On Short List to Replace Jerome Powell Bluntly Calls Trump Tariffs a Tax on Growth

"Speaking with CNBC's Steve Liesman on Squawk Box, Waller offered an otherwise upbeat take on the economy. I don't see recession in my forecast at all, he said, before adding the line that may haunt him in Trumpworld: But I do see slower growth through the year, mainly because of the tariff impact. Tariffs are a tax, and taxes are never typically good for growth. So you're going to get some slow growth out of this."

"In economic circles, Waller's assessment is downright pedestrian tariffs are effectively taxes on imported goods, and they usually pinch consumers and businesses alike. But in the MAGA orbit, orthodoxy isn't a selling point. Trump has long touted tariffs as both sound policy and populist theater, portraying them as punishment for foreign rivals while promising to bring jobs back to American soil. That message resonates in Rust Belt swing states, even as it leaves most economists wincing."

"Which leaves Waller in an awkward position: his frankness may win him credibility among policy wonks, but it could cost him the inside track for the Fed's top seat if Trump retakes the White House. Still, Waller didn't sound alarm bells. By downplaying recession fears, he projected calm that Wall Street and voters alike may welcome amid endless headlines about economic doom. The problem isn't his forecast it's the politics. Because in today's GOP, calling tariffs a tax isn't just an economic opinion. It's heresy."

Christopher Waller said he does not see a recession but expects slower growth this year, attributing the drag mainly to tariffs. He stated that tariffs act like a tax and typically hinder growth, affecting consumers and businesses. Tariffs remain politically popular within Trump's base, framed as both policy and populist theater promising job returns to American soil. Waller's candid economic assessment could bolster his credibility among policy experts while undermining his standing with Trump-aligned Republicans. The tension between economic analysis and political orthodoxy creates a potential obstacle to Waller's advancement within Fed leadership circles.

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