If consumer prices resume rising rapidly in the coming months, the world will blame its former economic saviour, Powell
THE US stock market soared not long after the Federal Reserve fulfilled the bulls’ wildest dreams and cut its benchmark rate by half a percentage point, a move that most major brokers deemed improbable just a few days ago.
But the market still ended on Wednesday (Sep 18) with modest losses, suggesting that investors are concerned that the central bank has prematurely declared victory over inflation and may have inadvertently given its foe succour.
The Fed pivoted to an accommodative policy, kicking off its rate-cutting cycle with a super-sized 50 basis point cut. In a statement, the Fed said it has “gained greater confidence that inflation is moving sustainably toward its 2 per cent” target, and warned that the “economic outlook was uncertain”.
