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Federal Reserve in a difficult place.
If these definitions continue, this may lead to 5 % inflation in the United States this year. Now many argue that this is a temporary shock that will seem to be a comprehensive policy maker, but this is due to the “temporary team” conversation, which represents a stigma on Powell’s heritage.
The market has now been fully priced to reduce a rate on June 18, with a high possibility of another at the following meeting in July. Over the next year, there are 109 basis points.
I am afraid that the Federal Reserve will not come to rescue. The last suspension in the federal reserve was more transformed than hawks, not in the other direction.
Some examples:
- KuglerThere may be reasons that make the definitions more long effects
- Goolsbee: Fear is if the customs tariffs on imports jump from imports only and move to other costs, or frighten people and change behavior
- WilliamsMy expectations are that inflation will be relatively stable this year with the dangers
- Dali The mentioned PCE data has decreased its confidence in its expectations for price discounts this year
- pillow Warning not to assume a single -time change in the definitions
- CollinsThe risks of inflation in the upward direction, remains the issue of the period of inflation that is driven by the customs tariff
There are no counterparts because all these federal reserve comments have been since FOMC.
If Powell takes a quieter tone, we must see another round of kicking and forming in the origins of the risk and reflecting the weakness of the dollar. Then again, the market can also conclude that if the pain in the stock is bad enough, the Federal Reserve is still present.
