As the Federal Reserve focuses achieving 2% inflation in setting monetary policy, so Trump’s policies, especially on tariffs, are likely to complicate the picture.

The Fed held its benchmark interest rate in the 4.25%-4.50% range at its meeting last month, and is expected to do so again at its March 18-19 meeting as officials wait for more clarity on how the economy responds to new tariffs and stricter immigration rules.

The model currently indicates that the effective Fed funds rate is nearly in line with the model’s estimate for an equilibrium rate. In other words, the Fed funds rate is more or less appropriate for current conditions. But given fast-moving events in Washington lately, the definition of “appropriate” could evolve quickly.