Tariffs Put Fed in Tough Spot, Raise Growth and Price Fears

An aggressive suite of tariffs announced Wednesday by President Donald Trump will significantly complicate the Federal Reserve’s job as it struggles to quash inflation and avoid an economic downturn, likely keeping officials in wait-and-see mode.

“They’re basically our worst-case scenario,” said Diane Swonk, chief economist at KPMG, who said the tariffs raised the likelihood of an economic slowdown in the US.

But Swonk and other economists said Fed officials will likely hold off on lowering rates to cushion the economy while they assess the potential impact of the tariffs on inflation.

The levies, which are harsher than many analysts ...