Federal Reserve Faces Critical Decisions Amid Inflation-Unemployment Dilemma

Amid warnings of rising inflation and unemployment, the Federal Reserve is preparing for tough decisions in the upcoming months. Newly released minutes from the May meeting highlight the central bank's dilemma in managing economic growth through monetary policy adjustments.

Inflation, spurred by proposed import taxes from the Trump administration, poses a significant threat to economic stability. The Fed faces uncertainty in deciding whether to tighten monetary policy to curb inflation or cut interest rates to support employment. The staff projections suggest recession risks amidst a weakening job market.

Despite President Trump's tariff delay impacting recession fears, ongoing negotiations maintain a climate of uncertainty. Fed Chair Jerome Powell emphasized the need for caution, with future tariff plans crucial to economic strategy. The Fed's next meeting will provide further insights into their approach amid these challenges.

(With inputs from agencies.)