Top officials from the Federal Reserve are expressing concerns over the economic outcomes related to existing tariffs, with Governor Waller predicting that sustained tariffs could push inflation levels towards 5%. Despite expectations that tariff-induced inflation may be temporary, the Fed acknowledges the substantial challenges ahead, including potential rate cuts if high tariffs persist. With inflation estimates soaring up to 4% and GDP growth expected to decline below 1%, the Fed is faced with a complex situation: balancing inflation control with economic growth. Several officials emphasized that the tariffs represent a significant shock to the economy, leading to difficult trade-offs in monetary policy and raising fears of a potential recession. The Fed continues to navigate uncertain terrain, as consumer confidence falters and inflation pressures mount.