Investors find some reassurance in the Federal Reserve's cautious approach, as concerns over tariffs impacting markets and the economy persist. President Donald Trump's swift tariff decisions since January 20th have unsettled stock markets and confidence among consumers and businesses. The Fed, in its recent policy meeting, chose to keep interest rates steady while acknowledging growing risks to growth and inflation. However, despite potential impacts from Trump's trade policies, the central bank refrained from anticipating a considerable rise in inflation or a major economic setback. Fed Chair Jerome Powell emphasized the high level of uncertainty and the need for more clarity before any significant policy changes are made. This stance was well-received by the markets. Traders adjusted their expectations post the Fed meeting, now anticipating interest rate cuts of 68 basis points this year. Stock markets reacted positively, with the S&P 500 rising by 1.1% on the day, while 10-year Treasury yields decreased by approximately four basis points. Nonetheless, the S&P 500 has experienced an 8% decline in the past month, erasing gains since Trump's election. Economic experts foresee increased recession risks, and indicators such as business and consumer confidence have weakened. The uncertainty surrounding policies is impacting consumer and corporate spending levels, causing concerns among investors about a potential recession and trade war.