An Uncertain Economic Moment Poses a Big Test for the Fed
The New York Times
The U.S. central bank prepares to meet under a cloud of concern about the economic hit from President Trump’s tariffs.
Just days after President Trump won the 2024 election, Jerome H. Powell, chair of the Federal Reserve, sidestepped a question about how the central bank would grapple with a toxic combination of high inflation, stagnating growth and rising unemployment.
“The whole plan is not to have stagflation,” Mr. Powell told reporters. “Knock on wood, we’ve gotten this far without seeing a real weakening in the labor market.”
Two months later, Mr. Trump’s aggressive tariff pronouncements, slash-and-burn cuts to the federal government and the resulting frenzy in financial markets have put the Fed in an incredibly uncomfortable spot.
Outright stagflation remains a remote prospect: The foundation of the U.S. economy is still solid, and it will take quite a big shock for it to crumble. But what once appeared to be a historic soft landing — with the Fed wresting control of rapid inflation while keeping the economy intact — looks increasingly vulnerable.
When the Fed wraps up its policy meeting on Wednesday, it is widely expected to hold interest rates steady at 4.25 to 4.5 percent. Mr. Powell recently downplayed the need for any imminent changes to borrowing costs, saying the central bank was focused on “separating the signal from the noise” when it came to the Trump administration’s policies. With the economy in a good place, he said, the Fed is “well positioned to wait for greater clarity.”
But if the economy starts to crack and inflationary pressures grow — a situation that consumers increasingly fear — the Fed’s policy decisions will take on an entirely new degree of difficulty. That risks putting the central bank more squarely in the cross hairs of Mr. Trump.
High-energy lasers can burn drones in the sky like a blowtorch. But they can be stymied by weather, and making them at scale will be a challenge.
Countries already walloped by a breakdown of the international trading order, war in Ukraine and chaotic U.S. policymaking are facing potentially lasting economic damage.
A Washington Post appeal for information about the military qualified as prohibited “solicitation,” according to defense officials.
The technology giant’s siding with Anthropic in its fight against the Pentagon stands out in an era when big companies have tended to keep quiet.
Drivers are paying an average of 20 percent more at the pump since the strikes on Iran began. The global oil price was higher and stocks were mixed.
Whether President Trump signaled that he may soon end the military strikes is weighing on the minds of investors, executives and others.
Ms. Stockwell, who recently left The Washington Post, is the third person named to the job in the past three years.
Across Asia, where countries are highly exposed to rising oil and gas costs and tightening supply, governments are acting to mitigate economic harm.
Pet owners are extending their health beliefs and practices to their furry friends.
The country found a home in the Middle East for its investments and growing markets for steel, electric vehicles and solar panels. Those are now at stake.
Elliott Hill is traveling the globe to meet with leagues, teams and athletes to rebuild connections and spur a turnaround for the world’s largest athletic-wear company.
A new generation of cryptocurrency, pegged to the dollar, is growing rapidly, promising faster payments and potentially lower interest rates. But regulators and bankers warn of risks.
Iran has launched waves of Shahed drones to menace Persian Gulf nations. The U.S. has unleashed its own copycat on Iran. It’s a sign of how war is changing.