Trump’s tariffs hinder Federal Reserve's economic communication

ft.com

Uncertainty over President Donald Trump's tariffs is complicating the Federal Reserve's ability to communicate its economic outlook. Economists warn that the Fed may rely too much on past data, which could hinder its decision-making amid changing trade policies. The Fed is expected to keep interest rates steady this week, despite recent inflation data showing a slowdown. However, the impact of new tariffs on consumer prices may not yet be reflected in the data, creating challenges for Fed Chair Jay Powell's messaging. Policymakers are also facing a disappointing jobs report, which adds to concerns about economic growth. The Fed's response to these mixed signals may be complicated by the unpredictable nature of Trump's economic policies, leading to increased uncertainty in the market.


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