What would the Federal Reserve Chair do now?

inflation
silicon valley bank
interest rate
Posted on . 1 min read

The hottest acronym in finance? WWJPD 🔥 🚒

💸 In other words: What Would Jerome Powell Do 💸

Everyone wants to know how Federal Reserve Chair Jerome Powell will respond to the latest inflation data.

📈 Inflation is still stubbornly high at 6% in February. Normally, that would suggest the Fed will continue raising interest rates.

🛩 But some analysts on Wall Street think the Fed will actually cut interest rates. That would be a big deal, signaling the Fed is more interested in avoiding a "hard landing" than taming inflation by any means necessary.

Why?

The implosion of Silicon Valley Bank changes the calculus. Other regional banks are also struggling. The Fed likely fears that, if it continues raising interest rates aggressively, the banking sector will suffer a crisis that will spread across the broader economy.

Source: New York Times, "Inflation report’s details show price increase stubbornness."

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