US erconomy remains stable, but Federal Reserve faces uncertainty
World Desk
The U.S. economy is largely healthy, with low unemployment and easing inflation, but Federal Reserve Chair Jerome Powell faces a challenging outlook amid trade tensions and tariff-related risks.
As the Fed meets this week, it is widely expected to keep interest rates steady near 4.4%. Inflation projections indicate a possible rise later this year, while unemployment may increase slightly. Economists suggest the Fed might cut rates twice in 2024, but officials are cautious, awaiting clearer economic signals.
President Donald Trump has criticized Powell for not lowering rates and urged faster cuts to boost growth and reduce government borrowing costs. However, many economists warn that rate cuts aimed at easing federal debt could undermine the Fed’s dual mandate of price stability and maximum employment.
Tariffs imposed by the Trump administration may increase inflation but could also slow growth, complicating policy decisions. Some economists believe inflation could temporarily rise to 3.6% by year-end but expect a weak economy to moderate price pressures.
The Fed plans to carefully assess the impact of tariffs before making further moves.
