Part 4/8:
The Federal Reserve's position becomes crucial amidst these tariff changes, as Lee elaborates on the need for a careful approach to interest rates. With short-term inflationary pressures likely to arise from the tariffs, the Fed faces a delicate balancing act. While they may not significantly change inflation expectations, the visible inflation could influence their decision-making.
Lee anticipates that central banks in affected countries would likely resort to easing measures if pushed into a recession by tariffs. This could provide further economic support in the face of trade tensions.