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.
Powell addressed tariffs, stating the Fed will 'wait and see'. He highlighted the central bank's focus on economic data, inflation risks, and maintaining price stability amid trade policy changes and Trump's criticism.
After a series of three cuts toward the end of 2024, the Fed’s likely decision to hold steady reflects its cautious approach amid economic uncertainties and a landscape influenced by previous fiscal and monetary policies.
Now if there’s a 50-basis-point cut, what happens, I think, on balance, the market surges because it lowers that drag of interest rates across the economy makes stocks look on the margin more attractive.
In contrast, Super Micro Computer rebounded, gaining 2% after the company reassured customers and partners in response to a critical report from Hindenburg Research.
