Here's What Fed's Trade War Footing May Be

We know the Federal Reserve is charged with keeping inflation stable at around 2% while also fostering full employment. In the last nine years, these two goals never have seemed in conflict. For most of that time the Fed was dealing with inflation that was too low and unemployment that was too high, and thus the general direction of policy was pretty obvious. 

However, a trade disruption suddenly could put the Fed's two goals in conflict, as tariffs classically cause economic weakness as well as higher prices. Is this textbook view how this particular trade war will play out? And what would the Fed do in response to a trade-related economic slowdown? Here are my thoughts. ...906 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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