US Edition‘Stagflation’ risk puts Federal Reserve in tricky spot as it meets this week
- The Federal Reserve may signal a key interest rate cut twice in 2025, maintaining its forecast from December.
- Inflation dropped to a 3 1/2 year low of 2.4% in September but increased for four months before falling to 2.8% in February.
- Chair Jerome Powell stated, 'The economy's fine, it doesn't need us to do anything, really,' emphasizing the Fed's cautious stance.
- Christopher Waller indicated that the Fed could cut rates this year if inflation continued to fall, despite tariff impacts.
128 Articles
128 Articles
The Stagflation Risks Are Bigger Than the Fed Thinks
Stock investors don’t like slow economic growth because that means slower earnings growth, too, which is a headwind for equity prices. And they don’t like inflation because that erodes the present value of future earnings, a different and often more substantial headwind for stocks. If you combine the two — slow growth and higher inflation -- you get the worst of all worlds. So investors rightfully absolutely hate stagflation.
Fed may still cut interest rates this year—but now it could be ‘bad news’ if it does
Even as the economy undergoes what may be wrenching changes, the Federal Reserve on Wednesday is expected to signal it could cut its key interest rate twice this year — the same forecast it issued in December. Yet the reasons for those cuts may change dramatically, depending on how the economy fares. What were once seen as “good news” rate reductions in response to a steady decline in inflation back to the Fed's target of 2%, now could become “b…
Where next for the U.S. economy? — Harvard Gazette
Work & Economy Where next for U.S. economy? Richard Drew/AP Christina Pazzanese Harvard Staff Writer March 18, 2025 6 min read Kennedy School analyst’s recession warning includes worries about trade war, stock market, risk perception U.S. markets this month suffered heavy losses after China, Mexico, and Canada responded to President Donald Trump’s tariff push by imposing levies on American goods. M…
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