US Federal Reserve in ‘wait and see’ mode following tariffs

The US Fed sees risks on inflation and unemployment both to the upside, which could cause it to prioritise one side of its mandates over the other, writes KPMG US Chief Economist Dianne Swonk.

The United States (US) Federal Open Market Committee (FOMC) – the policy setting arm of the Federal Reserve – voted unanimously to hold interest rates at the current 4.25 percent to 4.5 percent range in May. The statement following the decision underscored the tariff hedging that distorted growth in the first quarter. The underlying growth in the economy was stronger than the 0.3 percent contraction in real GDP growth for the period suggested. Inflation has cooled but upward re...

Sign in below or register now to read the full article

Authors: Diane Swonk

Published Date: 08 May 2025