According to Jinshi Data, the head of Fidelity's $2.3 trillion fixed income business stated that Trump's trade war is disrupting economic prospects, and the Federal Reserve faces challenges in controlling inflation and maximizing employment goals. Robin Foley noted that the Federal Reserve's efforts to combat inflation are commendable, but employment still needs to be monitored. She pointed out that the central bank is in a dilemma.
At the time of Foley's remarks, the Federal Reserve paused its rate-cutting cycle that was set to begin in 2024, as Trump's tariffs could exacerbate inflation and impact the labor market. Futures markets indicate that investors expect the Federal Reserve to resume rate cuts in September, later than predicted at the beginning of the year.