The Federal Reserve is expected to maintain current interest rates at their meeting Wednesday, with officials likely projecting one or two rate cuts this year.
However, beneath this apparent continuity lies a significant strategy shift due to inflation threats from potential new tariffs.
While the Fed previously considered cutting rates based on declining inflation (good news), they now face a complex scenario where tariffs could simultaneously increase prices and weaken economic growth.
This puts the Fed in a difficult position: unable to easily cut rates due to inflation risks but potentially needing to address economic slowdown.