Posted 3/26/2024, 5:51:00 PM
Former Fed Official Warns Rate Cut Vows Could Backfire into 1970s-Style Stagflation
- Former Fed governor Warsh says rate-cut promises could worsen inflation like in 1970s stagflation
- Pre-committing to cuts loosens financial conditions, gooses economy, risks reigniting inflation
- S&P 500 up 27% from Oct low; 43% investors bullish on stocks next 6 months
- Dot plot forecasts 75 basis points of cuts in 2024 as inflation cools from highs
- If Feb PCE data unexpectedly shows inflation rebound, market may reset rate cut expectations