Inflation fears
But Fed officials are now striking a more cautious note, insisting they want greater confidence that inflation is under control.
Even though US interest rates are relatively high, US consumers continued to spend at a rapid clip, while the US jobs market has remained robust.
“That means that we don’t need to be in a hurry to cut,” Powell repeated last Friday.
Worries that interest rates will remain higher for longer will dampen exuberance in global share and crypto markets.
“It means we can wait and become more confident that, in fact, inflation is coming down to 2 per cent on a sustainable basis.”
The big concern for central bankers is that progress on reducing inflation may have stalled.
For instance, although US inflation fell to a relatively tame 2.5 per cent in the 12 months to February (according to the Fed’s favourite gauge), there were some worrying trends.
‘Last mile’ a struggle
Core inflation –…
