Wall Street stocks fell on Friday amid concerns of stagflation as data revealed consumer strain due to Trump’s tariffs, with the University of Michigan reporting a sharp decline in consumer sentiment and a rise in long-term inflation expectations. Consumer spending rose less than expected, prompting Goldman Sachs to lower its GDP forecast for the first quarter, while the Atlanta Fed revised its estimate to show a contraction. The Fed’s PCE price index indicated inflation above expectations, leading to speculation about potential interest rate cuts despite Powell’s reassurance about the economy’s strength.
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Tariffs could send inflation back up, top Fed official says
Federal Reserve's Concerns on Trade PolicyFederal Reserve Vice Chair Philip Jefferson expressed concerns that recently announced tariffs and uncertainty surrounding U.S. trade policy could undermine progress made in controlling inflation. This statement reflects a growing apprehension within the central bank as it attempts to navigate a challenging economic environment. Jefferson's remarks underscore the potential risks posed by trade developments on the broader economic landscape and the Fed's inflation goals. Full Article
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