[New FOMC Wording: Risks of Rising Unemployment and Inflation Have Intensified] In the May policy statement, US Fed officials stated that GDP growth turned negative in Q1, but even so, the Fed's policy committee still believed that the underlying economy was strong. They observed that the volatile trade statistics were the main reason for the contraction of GDP in Q1, as imports surged ahead of new tariffs. "Although fluctuations in net exports affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace," the statement read. However, in the new language of this month's policy statement, officials also acknowledged that "the risks of rising unemployment and inflation have intensified.