TechFlow news, March 17 — According to Jinshi Data citing the Financial Times, economists say the uncertainty surrounding Trump's proposed tariffs has complicated the Federal Reserve’s efforts to provide clear signals about the economic outlook, undermining its “data-dependent” approach.
As the Fed prepares to announce its latest interest rate decision on Wednesday, last week’s data showed inflation slowed more than expected in February, supporting the case for resuming rate cuts later this year amid signs of a slowing economy. However, policymakers are also weighing concerns that promised trade tariffs could exacerbate inflation or trigger an economic downturn—or both.
"The promise of future tariffs essentially puts aside the Fed’s data-dependent framework, meaning they will have to rely more heavily on forecasting models," said Joe Brusuelas, chief economist at RSM US, a tax and consulting firm.
While markets widely expect the Fed to hold rates steady this week, investors will closely watch the economic projections from Fed officials and Chair Jerome Powell’s post-meeting statement, which will reflect their outlook for interest rates over the coming years.
