Strategist: The Federal Reserve's dual mandate may go in opposite directions.

GateUser-6433627c · 2025-05-08T16:40:56+00:00

The Federal Reserve (FED) may not be able to achieve its dual mandate of maximum employment and stable prices simultaneously due to high uncertainty in U.S. policy. Trump's tariff policy has exacerbated the FED's dilemma, putting it in an awkward position. Although lowering interest rates is necessary, the FED may have to wait until the end of the third quarter to take action.

GateUser-6433627c

2025-05-08 16:40:56

Abstract generation in progress

[Strategist: The Federal Reserve’s Dual Mandate May Head in Opposite Directions] Seema Shah, Chief Global Strategist at Principal Asset Management, stated that the Federal Reserve has found itself in an almost desperate situation, where its dual mandate—full employment and price stability—may be at odds with each other. However, the incredibly high uncertainty of U.S. government policies will determine the timing and extent of these changes. Trump’s tough stance on tariffs has further exacerbated the Federal Reserve’s awkward position. In this scenario, the Federal Reserve can only choose to stand by. Rate cuts are necessary, but the Federal Reserve seems increasingly in need of waiting until the end of the third quarter for the window of opportunity to open.

TRUMP2,37%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

1 Likes