Chris Bergen, owner of a greenhouse business in northern Minnesota, is anxious about the economic impact of President Trump’s policies, particularly on trade and immigration. His reliance on imported materials such as peat moss and plastic pots places him at risk of price hikes if tariffs are implemented. The uncertainty is prompting a cautious approach to business expansion. The Federal Reserve is increasingly concerned about this corporate caution, as it complicates decisions about interest rates and reflects broader economic concerns, including anticipated price increases and slower growth that haven't fully materialized in economic data yet.
Every June, it trucks in more than six million pounds of peat moss from Manitoba. Suppliers have stopped quoting prices until they have more clarity on tariffs.
We're not putting our foot on the brake, but we are taking our foot off the gas, said Mr. Bergen, whose family has run the business for over a century.
The central bank is trying to get a better read on the economy as it debates when or if it can again lower interest rates with inflation still too high.
Businesses are warning of both higher prices and slower growth, effects that have yet to show up entirely in the economic data.
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