Institutions: Stagflation shock puts The Federal Reserve (FED) in a dual mission dilemma.

On May 9, Jin10 reported that Torsten Slok, partner and chief economist at Apollo Global Management, stated that the new tariff policy has put The Federal Reserve (FED) in an “extremely difficult position,” with inflation and unemployment rates expected to rise in tandem. Typically, rising inflation should be accompanied by a declining unemployment rate, but we are currently facing a stagflation shock, with the trade war delivering a double blow to the U.S. economy through rising commodity prices and weak sales. Slok warned that the current trade policy could lead the U.S. to face a “proactive trade reset recession,” with the necessary adjustments to the U.S. economy being so significant that they will inevitably trigger a recession.