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.
Powell Reluctantly Commits to Inflation Fight amid Recessionary Signals; Wall Street Anticipates a Fed Pivot
Powell: “The risks of doing too little are quite a bit greater than the risks of doing too much.”
Following the Federal Reserve’s 75 basis point interest rate increase last month, Chairman Jerome Powell made a curious statement during the press conference. He said that with this move in interest rates, they have now reached the ‘neutral rate’, a concept we touched on in last week’s edition of Market News & Views. What he is implying, intentionally or not, with the fed funds rate currently at 2.5%, is that this is sufficient to no longer contribute to the growth in inflation and GDP. Reaching the neutral rate is a new decision point for the Fed as it contemplates the need for yet higher rates and the risks they might bring to the economy.
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