Federal Reserve Bank of Chicago President Austan Goolsbee said persistent, outsize tariffs could renew supply-chain disruptions and drive up inflation.

New trade tariffs and supply chain disruptions could force the Federal Reserve into a difficult position, policymaker says.

Federal Reserve officials take great pains not to comment on fiscal policy, but the looming threat from tariffs is forcing their hand.

Chicago Federal Reserve President Austan Goolsbee warned on Wednesday that ignoring the potential inflationary impact of tariffs would be a mistake, citing the COVID-19 pandemic experience where supply chain disruptions drove up inflation.

Trade wars could lead to supply-chain disruptions and an inflation spike similar to the early pandemic, Austan Goolsbee said.