According to BlockBeats, on May 9, Federal Reserve's Bald stated that Trump's trade policies could increase inflation, reduce economic growth, and raise unemployment rates. Policymakers will face the difficult decision of addressing which issue.
Bald pointed out that the increase in tariffs could disrupt global supply chains, creating sustained upward pressure on inflation. Businesses need time to adjust their distribution networks, and small businesses may not be able to adapt quickly, potentially leading to closures.
Bald worries that tariffs during an economic slowdown will lead to higher unemployment rates. If inflation and unemployment rise simultaneously, the Federal Reserve may find itself in a dilemma.
