President Donald Trump’s rapidly evolving trade war threatens to resurrect an all-too-familiar question for the Federal Reserve: If inflation moves higher, will it be transitory?

US President Donald Trump has refused to say whether the US economy is facing a recession or price rises in the wake of his administration's changes to tariff threats against some of its closest trading partners. Asked if he was expecting a recession this year, Trump said there was a "period of transition" taking place.

Donald Trump has imposed tariffs on China, Canada and Mexico and this move will hit the US economy. The US President has said that 25 percent American tariffs on imports from Canada and Mexico will take effect from Tuesday after the 30-day pause on duties,