Federal Reserve officials warn that tariff uncertainty severely impacts business decisions, putting pressure on both employment and prices

According to the Zhitong Finance APP, Chicago Federal Reserve President Charles Evans stated on Tuesday at an agricultural conference hosted by the bank that the recent announcement of a new round of tariff measures by the Trump administration is causing businesses in the Midwest to adopt a wait-and-see approach, fearing that investment decisions will once again stagnate. Evans pointed out that the impact is particularly significant in the Seventh Federal Reserve District, located in manufacturing hubs such as Michigan and Iowa, as the tariffs involve products like heavy trucks, lumber, and cabinets. "Many people have simply put down their pens and are waiting for the policy to take effect," he said, noting that this uncertainty is reminiscent of the frequent adjustments to tariff rates and implementation dates following the announcement of country-specific tariffs by the Trump administration in April of this year. At that time, many businesses postponed major investment plans, which also became an important consideration for the Federal Reserve in maintaining interest rates. Although the Federal Reserve lowered the target range for the federal funds rate by 25 basis points to 4% to 4.25% earlier this month to mitigate risks in the labor market, officials have significantly differing opinions on the subsequent path. Recent months have shown signs of rising unemployment and slowing hiring in the labor market, but the scale of layoffs remains limited. Evans described the current labor market as exhibiting a "low hiring, low layoffs" situation. He also warned that rising inflation in the service sector and the price transmission effects of tariffs could prolong high inflation beyond expectations. On the issue of monetary policy independence, Evans expressed strong concerns. He candidly stated that he feels "uneasy" about proposals that would give the Trump administration direct influence over interest rate decisions. Research shows that central banks lacking independence often accompany higher inflation and poorer economic performance, "the experiences of various countries serve as a warning." On the same day, other Federal Reserve officials also spoke out. Boston Federal Reserve President Susan Collins emphasized in an interview in New York that although there are signs of softening in the labor market, inflationary pressures remain prominent, and therefore it is unwise to hastily accelerate the pace of rate cuts. She stated, "If we signal easing too quickly, the inflation risk will actually be amplified." Collins supports a modest rate cut in September and mentioned that future rate cuts will depend on data performance. She also pointed out that the current financial environment still provides some support for economic growth, and the Federal Reserve has "space" to assess the situation calmly. Federal Reserve Vice Chair Philip Jefferson, speaking in Helsinki, bluntly stated that the two lifelines of the U.S. economy, employment and prices, are both under pressure. He believes that the risks to employment are skewed downward, while inflation risks are skewed upward. However, within the Federal Reserve, newly appointed Governor Lisa Cook cast a rare dissenting vote at this month's Federal Open Market Committee meeting, advocating for a one-time rate cut of 50 basis points. Regulatory Affairs Director Michelle Bowman, who is seen as a potential candidate for the next chair, also holds an open attitude towards more aggressive rate cuts