News & Insights
Welcome to the FIA News & Insights, a one-stop resource that includes insights from senior investment professionals on timely market events, their views on the economy and their respective markets. Find updates on the latest media information on Frost Investment Advisors, LLC and the most recent reprints, as well as, archival information for your reference.
Fed was Leaning Wrong Again, Productivity Picture May Be Brightening, and Small-Cap Stocks Hurt by Rates and Inflation
In a recent speech, Federal Reserve Chairman Jerome Powell admitted that inflation is not falling fast enough to support imminent rate cuts, contradicting his press conference last month when he doubled down on three interest rate cuts for 2024. March’s benign outlook came despite an increase in the FOMC’s core inflation projection for the end of 2024 to 2.6% from 2.4%, as prices came in hotter than expected. Services inflation (excluding rent) shot up months ago, reaccelerating as wage costs stay high. The Fed also increased its long-run neutral Fed funds rate target to 2.6%, an early indication that Fed governors may be weak-kneed with their inflation flight.
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