Wall Street Breakfast Powell signals higher prices as Fed holds
Jun 19, 2025
The discussion dives into the Federal Reserve's strategies on interest rates amidst rising inflation and tariffs. Tariff costs are expected to hit consumers directly, raising questions about economic stability. Analysts explore a mixed stock market response as yields fluctuate. Insights into the potential for two rate cuts this year highlight the uncertainty in economic forecasts. Overall, it's a deep dive into how current policies are poised to shape financial landscapes.
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Tariffs Will Increase Consumer Costs
- Fed Chair Powell emphasized that tariffs will ultimately drive up costs for end consumers.
- This inflationary pressure is expected to manifest meaningfully in coming months, impacting economic decisions.
Fed Predicts Slower Growth, Higher Inflation
- The Fed's economic projections foresee slower GDP growth and a slight rise in unemployment for 2024.
- Inflation is expected to tick up due to tariff effects, indicating stagflation risks.
Fed's Dovish Bias Amid Uncertainty
- Despite raising unemployment and lowering GDP growth forecasts, the Fed's dot plot still predicts two rate cuts in 2024.
- There is high uncertainty about economic risks, making the outlook far from unanimous among policymakers.