Federal Reserve Meeting Minutes: Uncertainty Has Increased Relative to the Average Level of the Past 20 Years

The Federal Reserve meeting minutes mentioned that staff continued to note a significant amount of uncertainty surrounding trade policy and other economic policies, and now believe that the uncertainty of forecasts has increased relative to the average level of the past 20 years. The risks to actual economic activity are considered to be tilted to the downside, and staff believe that the likelihood of the economy falling into a recession is almost as great as the baseline forecast. The substantial upward revision of the 2025 inflation forecast is considered to keep the risks surrounding the inflation forecast for that year balanced. Thereafter, Federal Reserve staff continued to believe that the risks surrounding the inflation forecast are tilted to the upside, and the recent rise in some inflation expectation indicators has increased the likelihood that inflation will be more persistent than the baseline forecast assumption.