Fed's Musalem Says Monetary Policy Moderately Restrictive; Inflation Appears On Track For 2% Target Over Time, But Services And Shelter Inflation Remain Sticky; More Disinflation Work Needed; Labor Market Cooling With Low Layoffs, No Longer An Upside Risk To Inflation; Recent Data Boost Confidence In Inflation Control; Balance Of Risks Between Inflation And Job Market Now More Balanced; Policy Rate Change May Be Approaching
Portfolio Pulse from Benzinga Newsdesk
Fed's Musalem indicates that monetary policy is moderately restrictive and inflation is on track for the 2% target over time. However, services and shelter inflation remain sticky, requiring more disinflation efforts. The labor market is cooling with low layoffs, reducing its risk to inflation. Recent data boosts confidence in inflation control, balancing risks between inflation and the job market. A policy rate change may be approaching.
August 15, 2024 | 1:20 pm
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POSITIVE IMPACT
The Fed's moderately restrictive monetary policy and confidence in inflation control suggest a stable economic outlook, which could positively impact SPY. However, sticky services and shelter inflation and potential policy rate changes introduce some uncertainty.
The Fed's stance on monetary policy and inflation control is crucial for SPY, as it reflects the broader economic outlook. The balance of risks and potential policy rate changes could lead to market stability, benefiting SPY in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80