Fed spokesperson: Powell and his colleagues may continue to take a wait-and-see approach and decide not to cut interest rates for now

Mars Finance News, on May 7, the Wall Street Journal reporter Nick Timiraos, known as the "Federal Reserve mouthpiece," wrote that Trump's tariff policy was implemented in a chaotic manner, putting the Federal Reserve in a dilemma: whether to address economic recession or stagflation. This week, the two-day policy meeting of Federal Reserve officials will focus on how to communicate cautiously in such difficult trade-offs. Federal Reserve Chairman Jerome Powell and his colleagues may continue to take a wait-and-see approach, refrain from cutting interest rates, and plan how to fine-tune this strategy. This "strategic patience" reflects the Federal Reserve officials' reluctance to prematurely abandon their determination to fight inflation. The current challenge facing the Federal Reserve can be likened to a goalkeeper's dilemma: whether to "dive to the right" - maintaining interest rates to curb inflation, or "dive to the left" - addressing economic slowdown through interest rate cuts. "We will make a judgment that is undoubtedly very difficult," Powell said last month. If the Federal Reserve acts too early and tries to take stimulative measures before an economic slowdown, it may exacerbate short-term inflationary pressures caused by tariffs or commodity shortages. "This will not be a cycle where the Federal Reserve will cut rates early due to predicting an economic slowdown. They need to see signs of slowdown in actual data, especially in the labor market," said Richard Clarida, who served as Powell's deputy for three years.