Deutsche Bank analysts have identified a "material risk" of a U.S. recession if aggressive tariffs are enacted, suggesting that the Federal Reserve may need to deviate from traditional policy responses. In various tariff scenarios, even a best-case situation could push core PCE inflation above the Fed's target, while a mid-case could lead to modest growth slowdown and inflation rise. The worst-case scenario, characterized by higher tariffs and rising unemployment, could trigger a mild recession, prompting the Fed to cut rates to mitigate economic fallout.