Tariffs, Tax Cuts, Fed Testimony Top a Crowded Week for the Economy

Washington is operating in split-screen mode at the moment. On one screen is the daily drama from the new Trump administration and billionaire presidential pal Elon Musk as they work to slash federal spending and handcuff the civil service bureaucracy.

On the other, business continues as normal. And this week will provide an example of that with the time-worn spectacle of a Federal Reserve chairman giving Congress a semiannual update on the economy and interest rates.

The week also provides an opportunity to check in on the progress of inflation, an issue that played a pivotal role in the return of Donald Trump to the White House.

And on that note, the news is that inflation still lingers above the 2% target set by the Fed. The central bank held rates steady at its meeting in January, and analysts do not expect any change at the next meeting in March. As for the consumer price index, due out on Wednesday, it should rise by 0.3% for the month and 2.9% for the year.

Sam Bullard, managing director and senior economist for Wells Fargo’s corporate and investment banking group, wrote on Sunday that “the path back to the Fed’s 2% target remains bumpy, with the potential of material headwinds arising.”