MW Businesses are 'on pause' or 'paralyzed' until Washington's 'fog' lifts, Fed's Barkin says

By Jeffry Bartash

Trump administration's new policies 'have created a sense of instability,' Richmond Fed chief says

Businesses are "frozen" or "paralyzed" with indecision and consumers are showing "signs of caution" because of all the rapid-fire changes in Washington, creating a "fog" over the economy.

So says the president of the Richmond Federal Reserve. Thomas Barkin said all the recent changes in tariffs, immigration, taxes, regulation and the size of government have made it almost impossible to figure out where the economy is headed.

"One can debate the pros and cons of these policies over the medium term, but, in the near term, the pace of change seems to have created a sense of instability," he said in a speech Thursday in Lexington, Va.

"With all this change, a dense fog has fallen. It's not an everyday 'forecasting is hard' type of fog. It's a 'zero visibility, pull over and turn on your hazards' type of fog," Barkin said.

The lack of uncertainty extends to the Fed, too, Barkin said. The central bank is unlikely to change interest rates until the fog starts to clear.

"We face the same fog as businesses and consumers," Barkin said. "How does one drive in fog? Carefully and slowly, and if there's a safe place to pull over, you do so to avoid getting in trouble. That's where we are."

-Jeffry Bartash

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March 27, 2025 17:26 ET (21:26 GMT)

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