Federal Reserve's Balancing Act Gives Respite to Tariff-Struck Investors

Investors are taking some comfort from the US Federal Reserve's wait-and-see approach, after being rattled by tariff-related turmoil that poses a threat to markets and the economy.

- REUTERS

Since returning to the White House on January 20, US President Donald Trump's rapid-fire tariff policies have spooked stock markets and dented consumer and business confidence, with investors balancing hopes of a pro-business, deregulatory, and lower tax agenda against fears of a trade war and potential recession.

Fed policymakers signaled a cautious stance of their own on Wednesday at a policy meeting that left interest rates unchanged but acknowledged rising risks to both growth and inflation.

Still, the US central bank remained hesitant to price in a lasting inflation surge or a significant economic blow from Trump's trade policies. Fed Chair Jerome Powell stressed that uncertainty was high and that the central bank was waiting for greater clarity—a message that resonated with markets.