NEW YORK (Reuters) – An escalation of U.S. trade tariffs would harm the economy's prospects, based on a Fed official who is making it his business to make the alarm with lawmakers and government officials.

"What's transpiring within the short-run certainly isn't positive, however for me it isn't sufficient yet – yet – to materially change my?outlook," Dallas Fed President Robert Kaplan told Reuters within the interview on Friday. Still, he explained, he would ought to downgrade his outlook if tensions between your U.S. and trade partners escalate. Although Fed's job will not be to set trade policy, it must reply to it, he said.

"I'm not doing my job when we don't call out this trade analysis," to your public, Republican and Democratic policymakers, and also to appointed and elected officials, he was quoted saying. "Additionally, it is an important part of my job to out relevant conditions affect economic boost the United States, even when they may not be inside purview of the Fed." (For highlights within the interview see)

The Trump administration earlier this week again raised the stakes in the tit-for-tat trade war with China, saying may well slap Ten % tariffs on an extra $200 billion importance of Chinese imports. U.S. trade disputes can also be escalating with Europe, Canada and Mexico that can slow business investment from home.

Kaplan, whose district heavily will depend on exports to Mexico, said that is already which has a "chilling effect" on capital expenditures plans which is hurting, as an example, soybean shipments and firms to do with aluminum. Longer-term impacts like currency fluctuations and geopolitical instability could possibly be worse, he said.

For now, Kaplan, who already leans dovish on monetary policy, continues to expect one other apr hike in 2010 including a little extra tightening next season. In case tariffs expand to more goods or Western automobiles specifically, he stated, "obviously that would cause me to rethink."

The U.S. central bank is careful to never overstep its inflation and employment mandates into fiscal decisions like trade. A Fed report back to Congress on Friday barely addressed the impact from the Trump administration's protectionist policies except for noting that uncertainty would be a concern to markets.

Yet a Reuters writeup on Fed chair Jerome Powell's public calendar showed that within his first 4 months as head from the U.S. central bank, he spent more hours with lawmakers and White House advisers than did his predecessor, Janet Yellen.

In the interview with radio show Marketplace on Thursday, Powell said: "I'm planning to wear the carpets of Capitol Hill out by walking those halls and choosing members" to explain Fed decisions and reply to concerns.

Kaplan said it was yet ahead of time to predict how trade policy will unfold. "I continue to have as the possibility if not a probability that any of us recall eighteen months from now, we'll look back on now as rhetoric but some actions nevertheless ultimately won't intensify," he said. "But I don't know."