"Fed Messenger": Trump's policy may leave the Fed in a lose-lose situation

On May 6th, Nick Timiraos, the "Federal Reserve's mouthpiece", said that President Trump's haphazard tariff policy could leave the Federal Reserve in a lose-lose situation: either dealing with a recession or dealing with a period of stagflation. At this week's meeting, the Federal Reserve will have a tricky communication around these trade-offs. Powell and other officials are expected to continue their wait-and-see stance on interest rate cuts and develop strategies for how to refine that stance. < b > This deliberate patience reflects officials' determination to avoid giving up the fight against inflation too soon. Richard Clarida, a senior adviser at bond giant Pimco, said, "This is not going to be a cycle where the Federal Reserve preemptively cuts interest rates because it predicts a slowdown. They actually need to see that in the tangible data, especially the labor market. "