Internet reports that the Federal Reserve Musalem said that U.S. economic growth may fall "significantly" below trend levels and the unemployment rate will rise during the year as businesses and households will adapt to prices driven up by new import tariffs. "I don't have a baseline for a recession, but I think economic growth could be well below trend," Musalem said, estimating growth at around 2%. He said that "risks in both directions will become reality." Higher-than-expected tariffs will put pressure on prices, falling confidence and the recent sharp decline in the stock market may curb spending, and hit household wealth and rising prices will have an impact. These factors add up to slow economic growth. Musalem, who has a vote on interest rate policy this year, said the response of monetary policy will depend on how inflation and unemployment evolve in the coming months, whether price shocks persist, and whether inflation expectations are consistent with the Fed's 2 percent inflation target.