Minneapolis Fed President Neel Kashkari Warns the Trade War Is Like a ‘Game of Chicken’

(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari warned about the economic cost of a trade war, likening America’s confrontation with countries such as Canada and China to a dangerous teenage game.

“It’s a little bit like a game of chicken,” he told a local radio station Tuesday, referring to the competition where two drivers race toward each other until one finally swerves and loses the game. “Once in a while you actually run into each other, and so we have to be careful.”

Kashkari was giving interviews at the Minnesota State Fair, wearing blue jeans and boots.

His comments came during a wide-ranging interview in which the central banker discussed topics ranging from the Hamilton musical, the location of the Minneapolis Fed and whether American currency notes contain traces of cocaine. His remarks are part of the regional Fed president’s push to expand the bank’s outreach and discuss the local and national economy with members of his district, which also covers the Dakotas, Montana and parts of Wisconsin and Michigan.

His comments also underscore growing concern at the Fed that tit-for-tat tariffs between the U.S. and its biggest trading partners will undermine economic growth. Other Fed officials have cautioned in recent weeks that a trade war could hurt confidence, stymie business investment and drive up some prices.

“I’m hoping that everyone realizes that we have much more to lose than we have to gain in a trade war,” Kashkari said, singling out farming as an industry that’s particularly under pressure from tariff concerns. “It’s bad for the U.S. economy, it’s bad for the global economy. But we also need to achieve fair trade.”

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