Core Viewpoint - The Federal Reserve's stance on high tariffs indicates potential significant impacts on the U.S. economy, particularly the labor market, with a possibility of rising unemployment if tariffs are reinstated [1][3]. Group 1: Economic Impact of Tariffs - Federal Reserve Governor Christopher Waller expressed concerns that reinstating high tariffs could lead to layoffs and a significant increase in the unemployment rate [1]. - Waller noted that while the impact of tariffs may not be immediate before July, the full restoration of high tariffs could directly affect the U.S. job market [1][3]. - The potential for a sharp rise in unemployment may prompt the Federal Reserve to consider interest rate cuts as a response to economic slowdown [1][3]. Group 2: Federal Reserve's Policy Flexibility - Waller's comments reflect the Federal Reserve's sensitivity to economic conditions, indicating a willingness to adjust monetary policy based on labor market performance [3]. - Cleveland Fed President Loretta Mester highlighted the need for clearer economic data before the Fed considers adjusting interest rates, adding uncertainty to future policy directions [5]. - The Fed's approach may remain patient, awaiting more definitive economic signals before making any decisions regarding interest rate changes [5].