Tariff Turbulence: Trump's Global Shake-Up

President Trump's announced tariffs have reshuffled the U.S. economic outlook, stirring recession fears and comparisons to historical economic downturns. The levies target trade partners with rates up to 50%. The Federal Reserve faces potential stagflation as markets and economists react, complicating future policy decisions.

In a startling move, President Donald Trump unveiled sweeping tariffs, potentially reshaping the U.S. economic outlook. Targeting global trade partners, with levies up to 50% for China, the announcement has stirred recession fears, drawing parallels to significant downturns of the past.

The Federal Reserve, having battled inflation while maintaining low unemployment, now contends with potential stagflation. Fed officials note increased inflation risks and uncertainty. Citi economists estimate average import taxes could soar to 27%, compared to 2.5% during the Biden administration.

Global markets reacted swiftly; U.S. stock indexes dropped significantly, with tech-heavy Nasdaq experiencing notable losses. The Federal Reserve is facing heightened pressure as they gauge the new economic landscape's impact on inflation and employment, weighing potential interest rate cuts amidst escalating uncertainty.

(With inputs from agencies.)