The Federal Reserve's latest Monetary Policy Report to Congress, released on Friday, said U.S. inflation is somewhat elevated and the labor market is in solid shape, but suggested that President Donald Trump's tariffs have likely only begun to be felt and repeated the central bank's view that it can wait for more clarity before taking action.

Tell me a little bit more about why the Fed cut its outlook. Claire Jones So what we saw yesterday was the Fed’s economic projections really catch up with economic reality. The Fed releases quarterly forecasts.

Fed Chair Jerome Powell is engaged in a balancing act: projecting confidence while admitting “we don’t know” what comes next.