The Federal Reserve interest-rate schedule will be vulnerable to a stronger dollar, reduced Fed balance-sheet holdings and a flat yield curve. The challenge for policy makers will be to avoid excessively braking the economy during a period when fiscal tailwinds are due to diminish and ultimately reverse. Bloomberg Economics had previously projected that policy makers could delay the fourth rate hike of 2018 to early 2019, but the odds of this occurring have clearly diminished in light of both the regrouping of the dot plot at the September FOMC meeting and the upgrade of the medium-term outlook. Nonetheless, the Fed can wait until more is known about trade frictions, yield-curve flatness, the second-half growth profile and even midterm election results before finalizing their December decision.The China–United States trade war refers to the ongoing introduction of tariffs on goods traded between China and the United States.July 6, 2018, the United States imposed 25% tariffs on $34 billion worth of Chinese goods as part of U.S. President Donald Trump’s new tariffs policy, Which leads 200 billion in Chinese products to be subject to a newly proposed 10% tariff, that led China to respond with similar sized tariffs on U.S. products.
-Yelena Shulyatyeva, Economist