Tariffs Put Fed Chair in a ‘No-Win Situation’

“Federal Reserve Chair Jerome Powell is facing an increasingly dreadful task,” the Wall Street Journal reports.

“Economists, business owners and investors are betting that the uncertainty created by the sudden rollout of President Trump’s large tariff hikes, many of which are set to take effect Wednesday, will push the economy closer to a recession by weakening hiring and spending. That would call for cutting rates to cushion any downturn.”

“At the same time, the magnitude of tariff increases is likely to lead prices to rise substantially for many imported goods, including materials used by domestic manufacturers. That could make central bankers nervous about inflation and argues for keeping rates where they are despite gathering risks to the economy and labor market.”