The Federal Reserve has increasingly emphasized “uncertainty” in its public statements. Chair Jerome Powell used the term 22 times following the most recent interest-rate decision, and other Fed officials have repeated the theme in their remarks.
Much of this uncertainty is linked to proposed tariffs from the Trump administration. These trade measures complicate the Fed’s outlook for both inflation and economic growth, prompting officials to leave in place expectations for two interest-rate cuts later this year while acknowledging heightened downside risks.
Businesses are reflecting the same worries. Several major companies, including FedEx and Delta, have pointed to uncertainty as a factor when trimming their revenue and profit forecasts. That cautious tone from the corporate sector underscores concerns about how trade actions and shifting policy could weigh on demand and costs.
Consumers are responding as well. Measures of consumer confidence have slipped to levels not seen in about four years, as households become more cautious in the face of policy uncertainty and potential economic disruptions. Lower confidence can translate into reduced spending, which would reinforce the Fed’s careful approach to future rate adjustments.
In short, the Federal Reserve’s growing use of the word “uncertainty” reflects a broader unease across markets, businesses and households. Trade policy developments appear to be a key driver of that unease, complicating the Fed’s task of balancing inflation risks with the goal of supporting growth.