Federal Reserve Meeting Minutes: Inflation and Unemployment Risks Rise as of May Meeting, Policy Dilemma Ensues

BlockBeats News, May 29th. The latest release of the Federal Reserve's May meeting minutes showed that Fed officials acknowledged at the last meeting that in the coming months they may face a "difficult balancing act," confronting rising inflation and rising unemployment.

Officials' assessment of increased risks of an economic downturn supported this outlook. The simultaneous rise in inflation and unemployment will force policymakers to decide whether to prioritize tightening monetary policy to combat inflation or to support economic growth and employment through rate cuts. With the economy adjusting to the Trump administration's proposed higher import tariffs, "almost all participants indicated that inflation may be more persistent than expected." The Fed expects that due to the tariff impact, this year's inflation rate will rise "significantly," while the labor market is "expected to weaken considerably," with the unemployment rate rising above the long-term expected level of full employment by the end of this year and remaining at that level for the next two years. (Jin Shi)