Fidelity Fixed Income Chief: Tariff Policy Poses a Policy Dilemma for The Federal Reserve (FED)

According to Gate News bot, Jin10 reports from the Financial Times that a Fidelity executive managing $2.3 trillion in fixed income business stated that the Federal Reserve faces a directional conflict between controlling inflation and maximizing employment in the context of the economic outlook affected by Trump’s trade war.

Robin Foley pointed out that the Federal Reserve “has made progress in combating inflation, but the employment situation still needs to be observed,” and stated that the central bank is caught in a “predicament.” Due to the potential for tariffs imposed by Trump to raise inflation and impact the job market, the Federal Reserve has suspended its planned interest rate cuts scheduled to begin in 2024.

Foley also mentioned that the market’s expectations for interest rates have experienced “very unstable” fluctuations over the past year. Currently, futures market trading shows that investors expect the Federal Reserve (FED) to start cutting interest rates in September, which is significantly delayed from earlier expectations at the beginning of the year.