"The Fed will tolerate higher inflation for now in an attempt to protect the real economy," says Mohamed El-Erian of Queens' College

Investors are growing increasingly concerned that President Donald Trump’s tariff policies and federal layoffs could spark a U.S. recession. An even bigger worry is that the Federal Reserve might not be able to do much about it.

The Federal Reserve is expected to hold interest rates steady as new tariffs and recession concerns impact consumer confidence and economic stability.