Wage Growth and Inflation Risks Could Foil Expectations of Fed Rate Cuts
• Inflation could resurge and spoil perfect economic scenario that investors have priced into stocks
• Markets are betting on falling inflation allowing the Fed to cut rates significantly
• But wage growth means inflation could reach 3% in 2025 instead of cooling further
• Higher wages can further fuel inflation in a wage-price spiral
• This means the Fed may not be able to deliver the rate cuts that markets expect