Odaily News In their May policy statement, Fed officials said GDP growth turned negative in the first quarter, but even so, the Fed's policy committee still believes that the underlying economy is strong. They observed that large fluctuations in trade statistics were the main reason why GDP fell into contraction in the first quarter, as imports surged before the new tariffs. "While fluctuations in net exports have affected the data, recent indicators suggest that economic activity continues 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 higher unemployment and inflation have intensified." (Jinshi)