New FOMC statement: Risks of rising unemployment rates and inflation have increased.

Federal Reserve officials said in their May policy statement that GDP growth turned negative in the first quarter, but even so, the Federal Reserve policy committee still believes the underlying economy is strong. They observed that the significant fluctuations in trade statistics were the main reason for GDP contracting in the first quarter, as imports surged before the new tariffs. "Despite the impact of the fluctuations in net exports on the data, recent indicators suggest that economic activity continues to expand at a healthy pace," the statement said. However, in the new language of this month's policy statement, officials also acknowledged that "the risks of rising unemployment and inflation have increased."