Fed's Barkin Prefers to 'Wait and See' On Rates Amid Trump Policy Uncertainty
The Federal Reserve president prefers to keep interest rates "modestly restrictive" until he gains more confidence inflation is returning to the central bank's 2% goal, warning about lessons learned from the 1970s. The Fed kept its rates on hold at a meeting last month following three consecutive cuts as central bankers grew more cautious about the future path of inflation and the potential effects of new trade, tax, and immigration policies from the Trump administration. The challenge for the Fed now is to navigate uncertainty surrounding policy changes from Washington, as well as geopolitical conflicts and natural disasters.
- The ongoing uncertainty surrounding policy changes in Washington could have a significant impact on the Fed's decision-making process, making it more challenging to predict future rate movements.
- How will the Fed balance the need for cautiousness with the potential risks of allowing inflation to rise above its 2% target, which could lead to long-term economic instability?