Fed's wait-and-see approach likely won't be shaken by new GDP and inflation numbers
Published On Jan 30, 2025, 12:44 PM
The Federal Reserve is adopting a cautious wait-and-see approach on interest rates in light of new GDP and inflation data. Despite a reported annual GDP growth of 2.3% in the fourth quarter, which indicates strong consumer spending, inflation concerns linger as it remains above the Fed's 2% target. The Fed's chair, Jerome Powell, reassured that they would not rush any policy changes, especially with a new administration's economic policies looming. Economists suggest that while a rate cut could still be possible, any cuts are unlikely this year given current inflation trends.
Stock Forecasts
SPY
Negative
With the Fed's cautious stance and high inflation rates, growth in interest-sensitive sectors may slow down. Companies heavily reliant on consumer spending may face pressure as inflation affects purchasing power.
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