According to ChainCatcher, Nick Timiraos, a Wall Street Journal reporter known as the "Fed's mouthpiece," wrote that Federal Reserve Chairman Jerome Powell is facing an increasingly difficult task.
Economists, business owners, and investors generally believe that the uncertainty brought by Trump's sudden large-scale tariff increases - many of which will take effect on Wednesday - will push the economy closer to recession by weakening employment and consumption. This may require interest rate cuts to alleviate economic downward pressure.
Meanwhile, the magnitude of tariff increases could lead to significant price hikes for many imported goods, including raw materials used by domestic manufacturers. This might cause Federal Reserve officials to worry about inflation and support maintaining the current interest rate level, despite growing risks to the economy and labor market.
"They are in a dilemma," said Lawrence Meyer, a former Federal Reserve Board member.
The U.S. Congress has entrusted the Federal Reserve with the responsibility of maintaining low and stable inflation and a healthy labor market. Since more than forty years ago, no U.S. president's policies have posed such a profound potential conflict to these two tasks.
