The fed remains in “wait-sand-watch ‘mode as it is early to authentically assess the real effective impact of trump’s tariffs on the world’s largest economy.
AMID TARIFF-LED Uncertainty, The fed believes inflation will risk and growth will falter in the us. Fed Chair Jerome Powell Said Inflation May Accelerate Over
The Fed Forecast GDP growth of 1.4 per cent in 2025, down 0.3 per cent from the March Meeting. By the end of the year, it Sees Unempolyment Rising to 4.5 per cent and inflation at 3 per cent, well above the current level.
The Fed’s Outlook for the US Economy Carries of Stagflation.
How Big is the US Stagflation Risk?
At the current Juncture, The US Economy is in Healthy Shape. Inflation Eased Surprisingly in May, even thought experts expected a spike after Trump’s “Liberation Day” Tariff Announcements on April 2.
The US Consumer Price Index (CPI) Increased 0.1 per cent month-on-month in may, while year-on-yar-on-yar it rose 2.8 per cent.
K. Joseph Thomas, The Head of Research, Wealth Management at Emkay Global Financial Services, Pointed Out that Inflation Fell in the Us, As in the Run-up to Tariff Announcements, CONSUMER SPIKEDING SPIKEDING In the Us, Which subdued the price impact to some extent.
However, thomas highlighted that the fed is still wary of the likely nature of the incoming inflation data, and they believe that fog of uncertainty is still clouding the vision. Therefore, any future rate cuts would be data-Dependent.
“A close look at the US growth and inflation numbers underlines the potential for economy
Growth to Slow down further, with growth numbers coming down sequentially, and the latest number indicating a contraction. The numbers point to the potential for stagflation, and no full-fledged stagflation exists at present, “said thomas.
How a Slowdown in the US Economy May Affect the Indian Market?
Thomas believes us-content developments may not be of any serial consequence to domestic economy growth, which is driven mostly by domestic demand.
“External Factors may have only a fleeting influence on the macro variables or the markets. The fundamentals being strong for the economy before Progress in its secular uptrend, “said thomas.
The Fed’s Reluctance to Reduce Rates may also mean
“The expertry to lower the rates is lowered for the other center banks. This applies to the rbi too, and the rbi has alredy mundy munded away from an acommodative stance to a neutral stance. Currency Majors May Face Some IMMMIDITE CHLLENGES
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Disclaimer: This story is for educational purposes only. The views and recommendations about individual analysts or broking companies, not mint. We Advise Investors to Check With Certified Experts Before Making Any Investment Decisions, As Market Conditions Can Change Rapidly, and Circumstances May Vary.
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