Federal Reserve governor Michael Barr and New York Fed president John Williams warned Friday that President Trump's tariffs are expected to lead to higher inflation, elevated unemployment, and slower economic growth this year.

The Fed operates with a dual mandate of keeping the labor market healthy while maintaining stable prices. At the moment, the labor market remains solid and inflation, while not at the 2% annual level the Fed desires, has come down significantly. That could change if some of the more aggressive Trump tariffs take effect.

U.S. President Donald Trump's trade policies will likely lift inflation, lower growth, and raise unemployment later this year, Federal Reserve Governor Michael Barr said, leaving policymakers with a potentially tricky decision on which problem to fight.