**Excerpt:**
As of March 2025, the United States continues to grapple with persistent inflation, posing a significant challenge for the Federal Reserve. Core inflation, measured by the PCE price index, rose by 0.3% in February, maintaining an annual pace of 2.7%. External pressures, such as the Trump administration’s tariffs on imported goods, threaten to exacerbate price pressures, complicating the Fed’s efforts to achieve its 2% inflation target. Policymakers face a delicate balancing act, as higher prices strain household budgets and small businesses alike. With inflation showing no signs of easing and tariffs adding further uncertainty, the Fed’s cautious approach underscores the complexity of navigating an increasingly challenging economic landscape.
