Higher prices or fewer jobs? Fed, economy face no-win dilemma

The Federal Reserve is holding steady as it navigates uncertainty kicked up by President Trump's tariffs and his pressure to lower interest rates.

The Federal Reserve is holding interest rates steady as it navigates uncertainty kicked up by a president who keeps haranguing the central bank to lower them.

“‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue,” President Donald Trump posted on his Truth Social platform Friday morning, renewing a long-running barrage of insults against the central bank chair. “Other than that, I like him very much!” he added.

The president’s public pressure campaign on the Fed comes as the central bank faces an ironic, whiplash-inducing reversal.

Just months ago, it was on the verge of a rare feat — wrestling down a historic run-up of inflation without triggering mass layoffs, known as a “soft landing” — and preparing to keep cutting borrowing costs. But Trump’s rapid upending of global trade has pushed the Fed and its leader into a difficult position, in which they feel a wait-and-see approach may be their best strategy for now.

“The Fed has been plunged into an almost impossible situation whereby its two mandates will likely move in opposite directions,” said Seema Shah, chief global strategist at Principal Asset Management, referring to the Fed’s dual mission of keeping employment high and inflation low.