Fed Comments Stir Stagflation Fears
The S-word is making the rounds on Wall Street.
Wednesday's interest-rate decision from the Federal Reserve 'formally codified that stagflation pressures are the key challenge' for the central bank, according to Jason Pride, chief of investment strategy and research at Glenmede.
'The Fed isn't pulling any punches on the potential for tariffs to cause stagflation," wrote Jamie Cox, managing partner at Harris Financial Group, adding that trade-policy uncertainty "is too large to ignore."
Investors acknowledge that the stagflation prospects leave a pretty tough job for the central bank. 'The Federal Reserve is in a bind,' said Chris Zaccarelli, chief investment officer for Northlight Asset Management in Charlotte, N.C. With economic growth slowing and inflation still high, central bankers' dual mandate is 'pulling them in two opposite directions.'
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