Even Fed officials are trying to figure out how to do their jobs in the next Trump era

Federal Reserve officials are grappling with how to adjust monetary policy amid uncertainty surrounding President-elect Donald Trump’s proposed economic policies. Trump’s plans for sweeping tariffs on imports and stricter immigration controls could spur inflation, complicating the Fed's goal of maintaining economic stability. However, the uncertainty of when or if these policies will be implemented has divided Fed officials on when to update forecasting models.

While some, like St. Louis Fed President Alberto Musalem, advocate for immediate scenario planning, others, such as Atlanta Fed President Raphael Bostic, prefer to wait for more concrete details. Chair Jerome Powell has emphasized caution, opting for a "wait-and-see" approach while avoiding

 speculation about Trump’s potential actions.

The Fed faces the challenge of preparing for potential inflationary impacts from Trump’s policies, which could be enacted without congressional approval, creating abrupt changes. Despite this, the long-term effects of tariffs and other proposals remain uncertain, further complicating the Fed’s ability to make timely and informed interest rate decisions.