The Fed faces inflation challenges amidst trade tensions and economic uncertainty. Tariffs, energy costs, and labor market rigidity influence the Fed's cautious approach to rate cuts. Stagflation remains a risk.
Markets react to Fed policy shifts & economic uncertainty. Powell's stance impacts growth, inflation, and market selloff. Tech stocks Apple, Tesla, Nvidia see declines. Global trade tensions also contribute.
Erica Groshen, senior economics advisor at Cornell University and former vice president of the Federal Reserve Bank of New York, warned, however, that interest rates may not return to pre-pandemic levels, in part because the Fed is in the process of reducing its balance sheet.
In contrast, Super Micro Computer rebounded, gaining 2% after the company reassured customers and partners in response to a critical report from Hindenburg Research.
