Trump’s tariffs have created a dilemma for the Fed because the duties could both raise inflation — which the Fed would typically fight with higher interest rates — and slow the economy and push up unemployment, which the central bank usually tries to counter with lower rates.

The Federal Reserve kept interest rates unchanged in early May as officials weigh inflation and unemployment risks tied to Trump's tariffs and trade uncertainty.

Federal Reserve officials agreed earlier this month to hold off on any interest-rate moves while they evaluated the impact of President Trump’s tariffs on inflation, unemployment, and the broader economy.