*FED STAFF SAW RECESSION “ALMOST AS LIKELY’ AS MAIN FORECAST
*FED MINUTES: TARIFFS MUCH LARGER, BROADER THAN EXPECTED pic.twitter.com/GoXICkMydr
— Investing.com (@Investingcom) May 28, 2025
Federal Reserve officials are raising concerns over inflation, tariffs, and the weakening labor market. The latest FOMC minutes reveal growing worries that inflation could remain persistent, forcing difficult tradeoffs between price stability and employment. This signals ongoing struggles in balancing economic policy with mounting financial pressures.
Nearly all participants acknowledged the risk that inflation could continue longer than expected. The minutes highlight fears that tariffs, which have expanded beyond initial projections, could worsen the situation. The broad scope of these trade restrictions adds uncertainty to an already fragile economic outlook.
Federal Reserve staff warned that a recession is now “almost likely” under current forecasts. The combination of rising inflation and slowing job growth presents serious challenges for policymakers. The Fed is navigating two opposing forces—higher prices demanding tighter monetary policy and a labor market signaling the need for relief.
The minutes also reflect concerns over fiscal and trade policy. Officials noted that uncertainty surrounding government actions has made it difficult to assess the full economic impact. This hesitation suggests that major policy shifts may be delayed until the effects of tariffs and inflation become clearer.