Federal Reserve Evaluates Impact of Trump's Policies on the U.S. Economy

Global markets are closely watching the U.S. Federal Reserve's updated economic forecasts this week, providing clearer insights into how former President Donald Trump's policies have impacted economic projections.

Economists have recently adjusted their growth forecasts downward, raising concerns over recession risks and inflation pressures due to stringent tariffs imposed by Trump's administration, with additional tariffs potentially coming into effect next month.

Initially experiencing a stable economic outlook, the Federal Reserve now faces increasingly challenging scenarios amid heightened uncertainty and declining stock markets. Beth Ann Bovino, Chief Economist at U.S. Bank, mentioned the economy still has potential for a "soft landing" with inflation gradually receding to the Fed's 2% target but warned about multiplying shocks from ongoing trade wars and market volatility.

The Federal Reserve is expected to maintain interest rates at the current range of 4.25%-4.50% in its upcoming meeting, while investors anticipate three rate cuts throughout 2025.