Fidelity Fixed Income Chief: Trade Tariffs Put the Federal Reserve (FED) in a Policy Dilemma

According to Gate News bot, Jin10 quoted a report from the Financial Times of the UK, stating that the head of Fidelity, which manages $2.3 trillion in fixed income business, indicated that the Federal Reserve is facing a contradictory situation in balancing its dual mandate of controlling inflation and maximizing employment against the backdrop of the economic outlook affected by the Trump trade war.

Robin Foley pointed out that the Federal Reserve “has performed well in combating inflation, but the employment situation still needs to be observed,” and stated that the central bank is in a “dilemma.” Due to the possibility that tariffs imposed by Trump could raise inflation and affect the job market, the Federal Reserve has suspended its planned interest rate cuts that were set to begin in 2024.

Foley also mentioned that the market had experienced “very volatile” fluctuations in interest rate expectations over the past year. Currently, futures market trading indicates that investors expect the Federal Reserve to resume interest rate cuts in September, which is a significant delay compared to expectations at the beginning of the year.

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