Overview

• President Trump's sweeping tariffs and China's retaliatory measures have intensified a trade conflict, raising concerns about economic growth and inflation.
• Federal Reserve officials Neel Kashkari and Alberto Musalem signal a 'wait-and-see' approach, keeping interest rates at 4.25%-4.50% despite market expectations for cuts.
• Musalem predicts U.S. economic growth will fall below the 2% trend, with potential increases in unemployment as businesses and households face higher prices.
• Kashkari emphasizes the challenge of balancing inflation control with economic support, citing the risk of unanchored long-term inflation expectations.
• The Fed highlights heightened uncertainty and complex trade-offs in monetary policy, as tariffs and market volatility reshape the economic outlook.