Posted 12/14/2023, 7:38:00 PM
Markets Rally on Dovish Fed, But Economists Worry Premature Celebration Risks Prolonging Inflation
- Markets have effectively declared victory over inflation after Powell said it was too early to declare victory
- Some economists worry the market is driving Fed policy and will lead to trouble with lingering inflation
- Markets rallied strongly on perception of Fed's dovishness and loosened financial conditions
- Commodity prices surged, concerning some economists this will fuel inflation
- Economists question if Fed's upbeat forecasts match reality and whether rate cuts will reduce inflation