The Federal Reserve is getting ready for a tough economic situation. The central bank is worried about high inflation and slow growth. This mix is known as stagflation. The Fed's chair, Jerome Powell, has been talking about this a lot lately. He thinks the recent trade policies could make things worse.

Powell spoke at the Economic Club of Chicago. He said the tariffs are bigger than what the Fed expected. These tariffs could cause inflation to rise and growth to slow down. The Fed has two main goals: a strong job market and low inflation. Powell said these goals might clash. If that happens, the Fed will have to make some tough choices.

The Fed has to think about how close the economy is to its goals. It also has to think about how long it will take to reach them. This is a tricky situation. The Fed has to balance between controlling inflation and keeping the economy growing. It's like walking a tightrope. One wrong move could cause a big problem.

The trade policies are a big part of this problem. They could make inflation worse. They could also slow down economic growth. The Fed has to be ready for this. It has to have a plan. Powell's speech was a way to show that the Fed is thinking ahead. It's preparing for the worst. But it's also hoping for the best.

The Fed's job is not easy. It has to make big decisions that affect everyone. It has to think about the short term and the long term. It has to balance between different goals. And it has to do all this while the economy is changing. It's a tough job. But someone has to do it. And the Fed is doing its best.

The Fed's Plan for Inflation and Slow Growth

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