Fed's Goolsbee Says Painful Volcker-Era Disinflation Reflected Unanchored Inflation Expectations; This Time Inflation Expectations Have Been Anchored
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve's Goolsbee stated that the painful disinflation during the Volcker era was due to unanchored inflation expectations. However, he noted that this time, inflation expectations have been anchored.
June 18, 2024 | 6:21 pm
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POSITIVE IMPACT
The statement by Fed's Goolsbee suggests that the current inflation expectations are anchored, which could imply a less aggressive monetary policy stance. This may positively impact the SPY ETF in the short term as it reduces the risk of severe economic tightening.
Anchored inflation expectations suggest that the Fed may not need to implement aggressive rate hikes, which is generally positive for the stock market. SPY, being a broad market ETF, is likely to benefit from this sentiment.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80