U.S. Trade Policy Uncertainty May Impact Federal Reserve Decisions

According to Odaily, Neil Shearing, Chief Economist at Capital Economics, has highlighted the potential real-world impacts of the uncertainty surrounding U.S. trade policy under the leadership of U.S. President Donald Trump. This uncertainty is particularly evident in the Federal Reserve's actions. In a recent report, Shearing noted that the Federal Reserve might face a significant tariff price shock, although it could also turn out to be less severe than anticipated. This uncertainty may lead Federal Reserve officials to adopt a wait-and-see approach in the coming months. Shearing further explained that if high tariffs are eventually implemented, the resulting inflation could prevent further policy easing for the remainder of 2025. He emphasized that much depends on the unpredictable nature of decision-making.