Federal Reserve Signals Continued Rate Cuts Amid Rising Inflation
On Wednesday, Wall Street experienced a rally as investors interpreted the Federal Reserve’s signals to mean that interest rates would continue to be cut despite rising inflation.
Fed Chair Jerome Powell reiterated his view that inflation driven by tariffs would be temporary.
The Fed left rates unchanged; however, its updated economic forecasts showed expectations of lower growth and higher inflation.
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The “dot plot” indicated that while the median projection included two more rate cuts this year, underlying forecasts suggested only one.
Investors reacted positively to Powell’s comments, sending stocks higher and bond yields lower.
