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The Fed could find itself in a policy Catch-22 if tariffs spike inflation and slow growth
A complicated scenario is emerging surrounding the tariff drama that could put the Federal Reserve in an uncomfortable Catch-22, unsure whether to use its policy levers to tame inflation or boost growth. With many bridges to cross yet in President Donald Trump’s efforts to use the levies as a tool both of foreign and economic policy, the central bank will have a delicate balance to strike. Many economists expect the tariffs both to raise prices and shave the pace of gross domestic product, with the main question being a matter of degree on the extent of any need for Fed policy adjustments. “Maybe you get that ... (full story)