Boston Mayor Michelle Wu said Tuesday the city is bracing for potential federal budget cuts with “scenario planning” as she and the City Council begin negotiating the next fiscal year’s budget.

Wu, who has sparred with the Trump administration through sound bites and headlines, noted that the state of U.S. politics and finance “is such a chaotic environment” where policies are announced, paused and revised, leaving companies and local governments “grounded in a sense of unpredictability.”

“We are having, most of all, to plan for the unplannable,” Wu said on GBH’s Boston Public Radio. “And that means really having a cushion, tightening our belt at the city to prepare for the worst case scenario, but also not jumping ahead to assume that that will happen because that would involve slashing city services and cutting, in fact, what residents most need right now.

“For a city budget, where most of our resources go directly to the workforce that delivers the services, that would mean layoffs and hiring freezes,” Wu said, adding quickly: “We are not there yet right now ... but I am going to manage as hard as I possibly can for Boston to avoid that, because these are really critical services that underpin what makes our community healthy and safe and thriving.”

Wu’s comments came Tuesday as U.S. stocks began a rebound from what some labeled as a “tariff doom spiral” prompted by fears over President Donald Trump’s new tariffs on imported goods from countries across the globe.

Wu has said Boston depends on about $300 million of federal funds to support city services each year. Both she and the City Council have signaled intentions to limit growth within the next year’s city spending plan.

Wu unveil her proposal for the city budget Wednesday at the City Hall budget breakfast.

The mayor also encouraged the city’s major institutions to use their resources to try to resist when faced with harmful or unlawful actions from the Trump administration.

Harvard is at risk of losing $9 billion in federal contracts and grants as part of the Trump administration’s reviews of funding in a push against what it claims is antisemitism on college campuses. Last week, the administration issued a set of conditions Harvard must follow in order to receive federal money. The institution has since indicated it will borrow $750 million to brace itself for cuts.

“I know how much is on the line for hospitals, for universities, for cities, for law firms, but we’ve seen that even those who try to cut a deal, when you do that, [Trump administration officials] still come down on delivering harm,” Wu said. “I would encourage institutions who have resources to use those to try to fight for what is right because there are so many in our community who cannot feel safe doing so.”