Fed's Cook Says A Rise In Inflation Expectations Would Imply Keeping Monetary Policy Restrictive For Longer; Policy Would Also Need To Respond To Sharper-than-expected Weakening Of Economy, Job Market; Fully Committed To 2% Inflation Target; Inflation Has Slowed, Labor Market Tightness Has Eased; Risks To Achieving Inflation, Employment Goals Have Moved Toward Better Balance
Portfolio Pulse from Benzinga Newsdesk
Fed's Cook indicates that a rise in inflation expectations would necessitate maintaining a restrictive monetary policy for a longer period. The policy would also need to adapt to any sharper-than-expected economic or job market weakening. The Fed remains committed to a 2% inflation target, noting that inflation has slowed and labor market tightness has eased. Risks to achieving inflation and employment goals are now more balanced.

June 25, 2024 | 4:11 pm
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NEUTRAL IMPACT
The Fed's commitment to a 2% inflation target and the potential for prolonged restrictive monetary policy could impact SPY. Slowing inflation and easing labor market tightness are positive signs, but the need to respond to economic weakening adds uncertainty.
The SPY ETF, which tracks the S&P 500, is sensitive to Fed policy changes. Prolonged restrictive monetary policy could lead to market volatility. However, the easing of inflation and labor market tightness are positive indicators, balancing the overall impact.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 80