According to the Zhitong Finance APP, a former Federal Reserve chairman warned that the global trade war initiated by U.S. President Donald Trump, who is vigorously wielding the "tariff stick," could lead to a substantial reversal of the strong momentum that has helped alleviate inflationary pressures for decades. "Some of the forces driving the 'anti-inflation process' since the 1980s, 1990s, and even the 2000s are about to completely change direction," said former Federal Reserve Vice Chairman Donald Kohn in an interview on Thursday. After Trump announced a tariff of up to 25% on imported cars and threatened to impose harsher retaliatory measures against the European Union and Canada, the U.S. dollar and European stock markets fell in response. Furthermore, investors are increasingly concerned that the price increases triggered by tariffs, referred to as the "inflation beast returning," will constrain the Federal Reserve's ability to cut interest rates, as the most troubling issue for the Federal Reserve, "stagflation," may soon sweep across the U.S. economy. U.S. inflation has been declining since the early 1980s—Trump's trade war may turn inflation from tailwind to headwind. Iqbal Khan, President of UBS Asia Pacific and Co-President of Global Wealth Management, stated that amid the uncertainty in the market caused by current tariffs, the real risk investors face is stagflation. Khan said at a summit on Thursday, "When it comes to the core issue of risk, the key is not the rate of economic growth, but the risk of stagflation. This is the real threat to the market and the situation that all parties are striving to avoid. Major central banks around the world, including the Federal Reserve, clearly regard this as a top priority." Coincidentally, Nick Timiraos, known as the "new Federal Reserve correspondent," wrote after the Federal Reserve's interest rate decision that expectations of "stagflation" may make it difficult for the Federal Reserve to preemptively prevent a slowdown in the U.S. economy through interest rate cuts this year. He noted that the Federal Reserve's latest forecast indicates that the U.S. economy is facing the risk of "stagflation," where economic growth slows while inflation rates continue to rise. U.S. inflation has significantly slowed since the early 1980s, primarily due to the aggressive monetary policy of then-Federal Reserve Chairman Paul Volcker. Economists generally believe that the deepening globalization in subsequent years has also been an important factor in stabilizing U.S. prices. "However, we have seen the negative supply shocks caused by the Trump administration's tariff policies, as well as the potential threat of such shocks," Kohn said at a conference in Cape Town on Thursday. "The former tailwind of anti-inflation may be turning into a headwind, which will put the Federal Reserve in a difficult position." This veteran monetary policy expert, who served at the Federal Reserve for 40 years and left in 2010, is now a senior fellow at the Brookings Institution in Washington and was invited by the South African Reserve Bank to attend a seminar on inflation targeting The global widespread adoption of numerical inflation targets, along with the independent performance of global central banks such as the Federal Reserve, has contributed to a long-standing period of low inflation—despite the Federal Reserve's forecasting errors during the pandemic that led to significantly higher inflation in the United States. Cohen also warned that, against the backdrop of persistent high budget deficits and the U.S. President publicly pressuring the Federal Reserve to cut interest rates, the principle of the Federal Reserve's independence in formulating monetary policy is facing new challenges. "Trump claims he will not fire the current Federal Reserve Chairman Powell, but has repeatedly called for the Federal Reserve to cut interest rates," Cohen said regarding the current Federal Reserve Chairman, who was previously discussed for replacement by Trump, "I believe the political pressure on the Federal Reserve will not lessen at all."