Federal Reserve faces economic uncertainty amid tariffs and recession fears

The Federal Reserve begins its two-day meeting this week to decide the future of interest rates amid rising economic uncertainty.”Consumer confidence has fallen sharply. I mean, it’s levels now that are similar to what we saw during great financial crisis,” says Greg McBride of Bankrate.com.Falling confidence is hitting retail sales on everything from snacks to clothing, with major chains like Walmart citing tariff uncertainty as a major factor.”All of that uncertainty has really dented consumer confidence, not so much about the here and now, but about what lies ahead,” McBride adds.More tariffs are set to begin on April 2, which President Donald Trump says is necessary.”It’s a liberation day for our country,” Trump states.The administration argues that the import taxes are designed to protect American jobs and revitalize industry.”We don’t want people seeking cheap labor. We want them investing and building right here in the United States of America,” says Vice President JD Vance.However, a new report from the Organization for Economic Cooperation and Development warns these policies could backfire, pushing prices even higher and slowing growth.The White House has not ruled out a recession, and Democrats are criticizing the administration’s trade policies.”This is all cruel, incompetent recklessness,” says Illinois Gov. JB Pritzker.Experts say that while the chance of a recession has increased recently, it is still unlikely that the economy will experience a contraction.While the Fed is expected to hold rates steady, its economic outlook is crucial. Its projections could influence everything from jobs to interest rates in the months to come.