The Federal Reserve, in its semi-annual Monetary Policy Report to Congress released on 20 June, said its current policy stance is “well positioned” to meet forthcoming economic challenges. The central bank judged overall financial stability as “resilient” despite what it called “heightened uncertainty.” Officials reported that inflation remains “somewhat elevated,” with preliminary evidence that the 145% tariff on Chinese imports is beginning to lift prices and dent household and business sentiment. They cautioned, however, that it is still too early to quantify the full economic impact of the trade measure and noted that the effect has yet to appear in official data. The Fed described the labour market as “solid,” citing balanced supply and demand and “subdued” layoff activity. Liquidity in the Treasury market briefly fell in early April to levels last seen in early 2023 but has since improved, the report said. Policymakers also pointed to a broad-based decline in the dollar’s exchange rate against major currencies.