Trump's Tariffs: Central Banks Cannot Wait and Watch Forever

While they'll soon need to act, Trump ought to watch a movie clip

- DANIEL MOSS

It's discomforting to see the men and women who have saved the global economy numerous times be so flummoxed by the ongoing trade war. Even if they were less than fully convinced about what would ultimately be required, they tend to act decisively. Officials are feeling their way through the tariff drama, just like the rest of us.

This type of caution does, though, come with term limits.

The Bank of Korea reached the defensible conclusion last Thursday that it's better to hold fire while talks over the huge levies Donald Trump imposed on trading partners play out. As a major exporter and firm US ally, South Korea had reason to hedge when it kept interest rates unchanged. It's impossible to know what the White House will accept—or even if it will stand by any accords reached during the 90-day period when the most punitive duties are suspended. "Highly unpredictable," was how the Bank of Canada chief put it charitably a few hours earlier. US Federal Reserve Chair Jerome Powell, often in Trump's bad books, sees potential risks to both price stability and employment. At some point, he may have to lean more toward one of those two mandates.

Powell made light of the troubling times last Wednesday by referring to a line from the 1986 movie Ferris Bueller's Day Off: Life moves pretty fast. A day later, Trump mused about firing Powell.