Trade war is ‘prominent downside risk’

The growing trade war between China and the United States could increase the pressure on the economy in general, according to the president of the Boston Fed, Eric Rosengren.

The central bank official said in comments prepared on Tuesday that the ongoing conflict between the world's largest economies is a "prominent downside risk," adding that it appears to be an "important reason for the patience of lawmakers until this source of uncertainty is resolved. "

Rosengren, a voting member of the Federal Open Market Committee of policymaking, said that prolonged tariffs threaten economic growth and could increase market volatility.

"While my baseline forecast badumes that a trade agreement will occur without seriously disrupting global trade or global economies, it may be some time before the uncertainty is resolved," he said.

China and the USA UU They raised tariffs on billions of dollars of other products earlier this month. Those movements have pushed the S & P 500 to fall 2.8% in May. The large-cap US stock index is also on track to break a four-month winning streak.

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