Federal Reserve Faces Tough Balancing Act as Economic Outlook Remains Uncertain
• Rates could spike to 8% or more, with wide range of outcomes - strong growth to recession • Equity valuations are high, markets seem to price in 70-80% chance of soft landing • Inflation driven by fiscal spending, green economy, remilitarization, trade restructuring • Small rate changes may have less impact on future inflation than expected • AI could be as transformational as past innovations like printing press, steam engine, electricity