Washington —
The Federal Reserve stepped in last month to safeguard America’s labor market, cutting rates by a quarter point to shore up a slowdown in hiring. But it has another equally important problem still to address — one that has driven up the cost of living in the United States and continues to strain lower- and middle-income households.
Inflation — the other side of the Fed’s dual mandate — still hasn’t returned to pre-pandemic levels and President Donald Trump’s trade war has already pushed up some prices. The Fed came within a hair of its 2% target by the end of last year, but then Trump’s aggressive policies shifted the tectonic plates of the economy.
It’s a thorny issue that has divided policymakers on the rate-setting committee: The central bankers who called for rate cuts beginning in July — all Trump appointees — say they’re hopeful that tariff inflation will be temporary. Other Fed officials, however, aren’t convinced.
“We have been missing our mandate on the inflation side, our objective of 2%, for more than four and a half years,” Cleveland
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