Fed Faces Tough Balancing Act as Data Muddies Inflation Outlook

Reports show the economy is still growing too fast to fully cool inflation, while rising bond yields could halt activity.

War has erupted in the Middle East and political stalemate continues in Washington.

Underlying inflation appears to be cooling, but a housing and services price jump in September threatens the Fed's narrative.

Powell faces balancing recession avoidance with fighting inflation, complicated by bond yield moves that could help or hurt those goals.

Recent economic data challenges the Fed's view that disinflation will continue if growth stays strong, raising questions about the path of rates.