Market Analysis: Inflation remains sticky, the Federal Reserve is in a dilemma
Sparta Capital Securities' Chief Market Economist Peter Cardillo said that inflation data remains high. Although it is within expectations, it has only slightly eased compared to the previous value, and reports show that inflation is still stuck. This means that the Federal Reserve will continue to pause interest rate cuts. The Fed may be in a dilemma because recent macroeconomic data is cooling down, showing signs of economic slowdown. Now personal income is higher than we expected, so income remains strong, which means consumers still have purchasing power. Spending is lower than our expectations; some of this may be due to weather conditions but I think most of it's due to an economic downturn. This puts the Fed in a difficult situation with persistent inflation and a declining economy. If you add them together, it equals stagflation.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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