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The conversation around the Fed centers on J. Powell’s potential responses regarding the economy's dual mandate of fostering maximum employment while staving off inflation. As Powell prepares for his pivotal address, the focus will be on how he perceives the current economic indicators against the Fed's inflation target of 2%. Despite a reduction in inflation from earlier highs around 9%, the current CPI stands at approximately 3.3%, presenting Powell with a nuanced dilemma.
In recent discussions, there seems to be an evolving caution among investors regarding the sustainability of growth against potential inflationary pressures that could arise from policy changes projected by the incoming Trump administration.