Tariff Hikes: Economic Risks Tariff Tides: Rising Risks

In May 2024, the World Socialist Web Site published an article analyzing the ongoing economic anxieties and potential policy responses by the Federal Reserve. The article highlights growing concerns over a possible recession, fueled by high interest rates, persistent inflation, and a fragile banking system. It points to the Fed's dilemma: continuing interest rate hikes to combat inflation risk triggering a deeper economic downturn, while pausing or reversing course could allow inflation to persist. The article notes that factors beyond the Fed's control, such as global economic conditions and geopolitical tensions, significantly influence the economic trajectory. The author critiques the Fed's reliance on lagging indicators and suggests their models fail to fully capture the current economic complexities. They emphasize the distributional impact of monetary policy, arguing that rate hikes disproportionately affect working-class families through increased borrowing costs and potential job losses. Furthermore, the analysis touches upon the political dimensions of economic policy, implying that decisions made by the Fed have far-reaching consequences for social stability and wealth inequality. The article implies that the Fed's actions ultimately serve the interests of the financial elite. find the original article here: https://www.wsws.org/en/articles/2025/05/08/fdwj-m08.html