Bloomberg Surveillance Instant Reaction: Jay Powell on the Fed Decision
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Jun 18, 2025 The podcast explores the Federal Reserve's cautious stance on interest rates, with Jay Powell emphasizing a wait-and-see approach amid economic uncertainty. Discussion highlights challenges in navigating inflation and GDP growth while managing dual mandates. Experts analyze the Fed's credibility, particularly in balancing public needs with financial elite expectations. With updated forecasts for unemployment and inflation, this dialogue sheds light on the complexities of making informed monetary decisions in today's unpredictable landscape.
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Fed Pauses to Assess Economy
- The Fed is pausing rate changes to gather more data and assess economic conditions amid tariff uncertainty.
- Chair Powell emphasized they are well positioned to wait and see before making policy adjustments.
Fed Faces Stagflation Challenge
- The Fed's forecast shows stagflation with lower GDP growth but higher inflation this year.
- Cyclical pressures like tariffs and wage growth complicate the Fed's dual mandate management.
Low Conviction in Forecasts
- Fed officials express low conviction in forecasts, expecting changes as economic data evolves.
- The market should not rely heavily on current rate cut or economic growth projections.