Patrick Harker, a Federal Reserve official from Philadelphia, stated that the volatile trade policies pursued by the Trump administration make it challenging for Federal Reserve officials to make decisions regarding interest rates. Key highlights from his statements include: Given the current uncertainty, the Federal Reserve should adopt a wait-and-see approach before taking any new steps in monetary policy. There is still ambiguity about the impact of successive shifts in economic policies on the performance of the U.S. economy. The slowing pace of inflation decline alone justifies the Federal Reserve’s decision to keep interest rates unchanged for now. The Federal Reserve might face a difficult mix of rising inflation and increasing unemployment simultaneously. Economic data released so far remains strong and resilient. While the U.S. economy enjoys some flexibility, there are underlying pressures in its foundations. The U.S. economy faces several potential paths in the coming period.
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