Federal Reserve Unlikely to Rescue Economy Amid Tariff Turmoil
The Federal Reserve is not expected to intervene to shield the U.S. economy and financial markets from the ongoing tariff turmoil, according to recent reports. Analysts suggest that the central bank is adopting a cautious stance, wary of the potential inflationary pressures that could arise from aggressive monetary policy adjustments.
Local news from Las Vegas highlights the broader impact of tariffs, particularly on the tourism sector. The city, heavily reliant on international visitors, is feeling the pinch as tariffs disrupt global trade and travel patterns. Economists are now forecasting a risk of stagflation, a scenario where stagnant economic growth coincides with rising inflation, further complicating the Fed's decision-making process.
Recent data indicates a surge in near-term inflation expectations, adding to the complexity of the situation. The Federal Reserve's reluctance to act swiftly has raised concerns among investors and businesses alike, who are bracing for potential economic downturns. As the trade war continues to escalate, the pressure on the Fed to respond effectively is mounting, yet the path forward remains uncertain.
Related issues news
Are tariffs inflationary?
'Higher tariffs will likely cause 3% to 5% more inflation over the next year and a half than the U.S. would have had without them,' says Bill Adams, chief economist for Comerica Bank.
How do tariffs affect inflation?
The tariffs are likely to push up the cost of living as merchants are likely to pass higher costs of imports on to consumers, potentially reigniting inflation, economists said. However, the tariffs could also slow down the economy, putting downward pressure on demand and prices.
What is a global trade war?
A trade war is an economic conflict often resulting from extreme protectionism, in which states raise or implement tariffs or other trade barriers against each other as part of their commercial policies, in response to similar measures imposed by the opposing party.
