The tariff-led negotiations were part of Trump's team trade strategy, but were the tariffs also a tool to persuade a change in monetary policy? Whether it was or not, the Fed has now unwittingly entered into symbiotic relationship with fiscal policy and questions over autonomy could very well influence future policy decisions jeopardizing financial stability in the process.

Tariffs and the Fed  

The Federal Reserve does not have a seat at the table when fiscal policy decisions like the imposition of tariffs are implemented. As a result, policymakers are forced to accept fiscal policy decisions, like tariffs, as an input into their economic forecasts and policy deliberations. 

Federal Reserve Chair Jerome Powell stated that although monetary policy "cannot provide a settled rule book for international trade" monetary policy must take into account how trade disputes are affecting the economic and inflation outlook and adjust monetary policy to meet the mandated objectives.