“The committee is very much in the mode of waiting to see what policies are enacted,” according to Chairman Powell.

In his first term, Trump bashed the Fed for allowing higher interest rates in the U.S. vs. Europe to drive up the dollar and hurt exports. Next year will likely bring more of the same, as the U.S. economy remains considerably stronger, meaning rates here will likely fall more slowly than in the Eurozone.

Nevertheless, the Fed may feel compelled to raise interest rates as soon as the first signs of a tariff-led bump in inflation emerge.

Chicago Federal Reserve President Austan Goolsbee says that although the Fed will take its time reducing interest rates, the end result will be much lower rates if inflation stays near the Fed’s target.

The strike could disrupt the movement of goods and impact prices and the broader economy, similar to supply-chain disruptions during the pandemic.

At future meetings, FOMC policymakers will consider "additional adjustments" to rates based on "incoming data, the evolving outlook, and the balance of risks."

If officials could know with confidence where the neutral rate of interest lay, they could just move there and declare victory. But it's not that simple.

"The predominant risk at this point is that the softening in the labor market gains momentum and the economy tips into an unnecessary and unwanted recession."