FED FRUSTRATIONS

On one hand, the Fed sees short- to medium-term inflationary pressures building from a 1000% tariff increase, OBBBA fiscal stimulus, possibly rising wages due to manufacturing job onshoring, combined with the number of unemployed manufacturing workers available to work near record lows and exacerbated by increasingly substantial immigration outflows. On the other, the Fed also sees the labor market steadily softening. It’s a case of rising inflation vs. rising unemployment.