The president of the Atlanta Fed said Monday that concerns about trade may have thwarted the benefits of tax reform in terms of getting businesses to invest

Raphael Bostic, the president of the Atlanta Fed, said the trade concerns aren’t so high as to get businesses to scrap the projects they’re currently working on. But they are enough to get them to be hesitant about the future.

“I began the year with a decided upside tilt to my risk profile for growth, reflecting business optimism following the passage of tax reform,” Bostic said.

“However, that optimism has almost completely faded among my contacts, replaced by concerns about trade policy and tariffs. Perceived uncertainty has risen markedly. Projects already under way are continuing, but I get the sense that the bar for new investment is currently quite high,” he said.

On Friday, Trump announced tariffs on $50 billion of Chinese goods, and is feuding with Canada, Mexico and the European Union on metals, agriculture and automobiles, among other sectors.

Read: Escalating trade spat comes at a bad time for global growth, economist says

Using a term often employed by traders, Bostic said “risk off” behavior is now the dominant sentiment. “In response, I’ve shifted the risks to my growth outlook to balanced,” he said.

That wariness was reflected in the stock market on Monday, as the Dow Jones Industrial DJIA, -0.06% was down 122 points in afternoon action.

It should be pointed out that actual surveys of businesses have not been as pessimistic as Bostic. For instance, the Empire State manufacturing index released last week rose to an eight-month high.

On rate policy, Bostic said the central bank still hasn’t reached the so-called neutral rate — where policy is neither accommodative nor restrictive. He said he is comfortable continuing to move policy toward a more neutral stance.

“The level of the policy rate that qualifies as neutral is not something we know with precision,” Bostic said at the Rotary Club of Savannah. “But we are getting close to the lower part of most plausible estimates of the neutral rate. I don’t think we are quite at neutral yet, even after last week’s rate hike.”

Read:Fed lifts interest rates and aims for another pair of increases later this year