Fed's hands could be tied if inflation reverses course, economist says

March's Personal Consumption Expenditures (PCE) data arrived hotter than expected and GDP figures point to an economic slowdown. In this environment, economists and investors alike are revisiting the Federal Reserve's rate cut outlook. Stifel Financial Chief Economist Lindsey Piegza joins Yahoo Finance to discuss the prospects for Fed cuts.
Piegza notes that although March's PCE did not show "a material increase" in inflation, the Fed had been "expecting a sizable reversal" supporting the disinflationary trend. She suggests that this report could force another adjustment to the Fed's outlook and further delay any near-term rate cuts, with the possibility of rate hikes even coming back into consideration.
Regarding consumer behavior, Piegza acknowledges that the consumer remains "very resilient." However, she observes that consumers are becoming more cost-conscious, carefully weighing their spending decisions and seeking value, leading to a slowdown in "broad-based growth."
"Without more of a meaningful decline or improvement in inflation, after that minimal concession, I think the Fed's hands are tied, and we'd likely see the Fed move back to the sidelines for a second, extended pause," Piegza tells Yahoo Finance.
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[@andresmarchena6362]

Why would they be desperate to cut? Seems like desperation to cut is theirs not the Feds

[@alexdasliebe5391]

“The Age of Easy Money” is on YT by Frontline. Answers your observation.

[@alexdasliebe5391]

Their stated goal is unemployment. “Soften the labor market” … they won’t stop until unemployment goes up … they’ve not said what the accepted number of sui cides is, though

[@nickvin7447]

A full percentage point increase.

[@kimberiysmarketstrategy]

But then we added millions of migrants...

[@JRS-iq9pz]

Good for the CD's paying higher interest rates.

[@kimberiysmarketstrategy]

The Fed didnt expect inflation? 😂😂😂ya ok right!

[@CaliforniaMISC]

Increase rates

[@tracybrovan3997]

They should do it but they are not going to because it's an election year. Even though they said politics has nothing to do with it....I do not believe it one bit.

[@VietNguyen-vj4su]

1- what's healthy about it when credit card hits all time high ($1.3T) 1.1) all consumer debt topped $5T 2- Uncle Sam pays $1T in interest every three months - the solution is QE forever. there's no way the FED would be able to bring down inflation. 3- China, Japan, are not buying US debt; look at the bond market.

[@kimberiysmarketstrategy]

Exactly! They think we are stupid.

[@nickvin7447]

When everyone is saying the economy is strong, you can bet your life it isn't.

[@sumitomoO0O]

FED is desperate to cut rates so that asset prices go higher, we should make rich people happier

[@kimberiysmarketstrategy]

We arent buying more? Its just more expensive!

[@Barr894]

If inflation reverses course? Which planet is this guy on. Inflation is going up up and away. He probably thinks it transitory too. Deficits are increasing, not decreasing, and QE is the mother of all inflation.

[@MichaelMcCausland-pg6qs]

The FRN is toast

[@alexdasliebe5391]

FRN = Floating-Rate Note in this context? Thanks

[@maricel4083]

Emmm. Sa mga cars housing at iba pa sa business man yan. Sa mga Road lang po kasi po sobrang laki ang nawawala sa mga bansa kung sila china at iba pa ang mag pondo. But mga gamit parin like mga bacal cement all frm mny country bahala na si bansa mag managed nito. Basta wag puro mabaon sa utang kasi mahirap puro utang ni isa wala naman nag baibigay sa inyo sa amin ayyy... Look the srilanca. Baon sa utang si Pakistan baon din so mny country cnt pay also at kung bibitawan ko kayo 30% na bansa sa mundo wala nang pondo at utang lahat sa ibat ibang bansa hanggat mga lupain po nang mga bansa mapunta sa mga foreign. Mali po iyan ahh

[@teymurmamedov1572]

Resilient

[@XennialGuy]

How did you make the pink poop appear?