Strategist: The Fed's Dual Mandate May Head in Opposite Directions

Seema Shah, Chief Global Strategist at Principal Asset Management, stated that the Federal Reserve is in an almost desperate situation, as its dual mandate—full employment and price stability—may be at odds. However, the incredibly high uncertainty of U.S. government policy will determine the timing and extent of these changes. Trump's tough stance on tariffs further exacerbates the Fed's awkward position. In this scenario, the Fed can only choose to stand by. Rate cuts are necessary, but the Fed seems increasingly likely to wait until the end of the third quarter for the window of opportunity to open.