While the consumer price index for March showed inflation cooling slightly from the month before, the macroeconomic future is still looking a bit foggy, according to Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta. And the uncertainty around tariff policy, which President Donald Trump’s administration walked back slightly on Wednesday, appears to be the issue.

“Everyone is retrenching a bit,” Bostic said in an interview with “Marketplace” host Kai Ryssdal. “Investment is not as forthcoming. And I think folks are expecting everyone to pause, and that may materially slow down what aggregate growth looks like.”

Bostic and Ryssdal spoke about the latest inflation data, the macroeconomic outlook, and how tariffs and uncertainty are playing into it all. The following is an edited transcript of their conversation.

Kai Ryssdal: All right, so we'll go with the data point of the day. First of all, the consumer price index came out this morning lower than expected. One data point does not a trend make, but what do you think?

Raphael Bostic: Well, it's a positive development, for sure. The numbers could have gone in a different direction, and I was worried about that. But as you know, there's a lot that's gone on since those numbers were produced, and that's really what we're focusing on and trying to figure out, what the next set of numbers is going to look like.

Ryssdal: Well, so let's talk about that. The through line from Fed speakers, of which you are one today, and there have been many this week, and all you all have been saying: “Listen, we need to look through this tariff situation. We need to figure out long term what they're going to mean.” And my question is, how do you look through them when, No. 1, they're so big, and No. 2, they seem to happen or go away on a whim?

Bostic: Well, you're asking a very difficult question, and it's the question —

Ryssdal: It’s my job, Sir.

Bostic: I appreciate that. So, you know, one of the things that we are trying to do is figure out how everyone else is doing this. We're talking to businesses, we're talking to consumers to figure out how they're dealing with this unprecedented level of uncertainty and volatility. You know, as things are changing on a day-to-day basis, folks don't really know what they should be planning on or what they should be planning for. And so the question that we've been asking is, “Well, what are you doing in that context? How are you thinking about responding to this?” What we're hearing from most is that they're going to wait and see and hope that this thing clears up so that there's more certainty at some point in the future, but we'll see how long they can hold on. And I think that's one of the questions that we will be watching very closely.

Ryssdal: Yeah, but look, we've got this 90-day pause, and to be clear, it's not actually a pause, right? Tariff rates are still elevated, and the business response to those is going to be very, very real in the next three months, and that will be characterized by, maybe not layoffs, but certainly by companies slowing down on hiring, by slowing down on their capital expenditures. That will have an effect on the actual real economy, no?

Bostic: It could. You know, we talked to a lot of businesses before, and what they told us was that for the size of the tariffs that they were expecting, they thought they had strategies that could work. Many were thinking about passing through a bit of the cost. And to me, one of the big questions out there is whether consumers would take them on board. If the consumers do, then I think businesses would be less stressed and less concerned, but I have to say, it's an open question as to whether they will. We've just had a long period of elevated inflation when families are seeing this kind of volatility, uncertainty as well. They may pull back and be unwilling to do things. And so we're just going to have to see what the reaction is as all of this plays out.

Ryssdal: Setting aside the inflation and price-level part of this thing, what's your level of concern about the impact on economic growth with these tariffs? You know, the Atlanta Fed has its GDPNow tracker, and we all follow that. And it's down, right?

Bostic: Yeah, so it is down. First of all, I'm glad you're following it. It's a very great tool for keeping track of things. And it is down. And I would say, what we have heard from our businesses and what we have seen — and it has not shown up as much in the formal data yet, but we'll see whether it does — is that everyone is retrenching a bit. Investment is not as forthcoming. And I think folks are expecting everyone to pause, and that may materially slow down what aggregate growth looks like. The other thing I would say for us, you know, employment is our mandate, not GDP. Most businesses that we're talking to are telling us that they're willing to basically play a wait-and-see on that as well. They're not looking to lay people off. They're not looking to hire either. I think what we're hearing is “stasis for now, and then we'll see if that posture can support what the future looks like it's going to bring.”

Ryssdal: You know, we've been talking for a good long while now, you and me. And I — look, we met once in real life. It's a long story involving a restaurant in Pasadena, but that's a whole different thing.

Bostic: Yes, I remember that.

Ryssdal: But you are, it seems to me, a cautious person by nature. And I don't want to mischaracterize this, but it does seem that the last five or six minutes of this conversation, you have been more cautious than usual, and maybe a tad more downbeat. Is that fair?

Bostic: So, cautious for sure. You know, an analogy that I've been using a lot is driving in foggy conditions. When you're driving in the fog, you’ve just got to slow down. When the fog gets thicker, you're going to pull over and wait. I think that's the wise thing to do. And I think for me, it's pretty clear, the fog has gotten quite a bit thicker in the last couple of weeks. So if you want to say I'm more cautious than before, sure. I mean, I do get paid to be cautious, though, so I want to make that clear as well. In terms of downbeat, look, I think the pressures that are out there are not the best for our mandates. All the models say that the introduction to tariffs is going to put upward pressure on prices, and I've seen more reports of recession fears in the media and from our business contacts than I've heard in a year and a half or two years. And so that's also going to put pressure on our mandate, the employment mandate, in a way that is not positive. But today, I would say we still have a lot to play out. And as you know, the current environment today might not be the current environment tomorrow. And so some of these forces may wind up being weaker than they look like they're going to be today. They could be stronger as well. And that's another reason why caution, I think, is the most prudent approach today.