Under the wave of tariff shocks, The Federal Reserve (FED) faces a "rate cut-anti-inflation" policy paradox.

Observers of The Federal Reserve (FED) point out that the tariff increases from the Trump administration are pushing the Central Bank towards a policy crossroads. Economists warn that the large-scale tariff measures set to take effect may push the U.S. economy to the brink of recession by suppressing corporate investment and consumer demand, which objectively requires the Central Bank to hedge against economic downturn pressure through interest rate cuts. However, the increased import costs due to tariffs may translate into imported inflationary pressure, forcing the FED to maintain the current interest rate level to stabilize price expectations.

"This is the toughest dilemma in four decades," former Fed Governor Lawrence Meyer noted. The central bank has a dual mandate to ensure price stability and full employment at the same time, but tariffs are creating a policy backlash: interest rate cuts to stimulate the economy could exacerbate inflation, and inflation-controlled rate hikes would deepen recession risks. Historical data shows that since the 1980s, no presidential policy has so profoundly torn apart the Fed's policy objectives.

Market analysts have noted that this policy contradiction has been reflected in the recent minutes of The Federal Reserve (FED), where officials' assessments of the long-term impact of tariffs have significantly diverged. Investors are closely watching the upcoming interest rate decision to be announced this month, looking for clues on how the Central Bank is seeking to balance "stabilizing growth" and "preventing inflation."