During last week’s press conference after the Federal Reserve’s (Fed) rate decision, Chairman Jerome Powell warned his audience there is no risk-free path for interest rates right now. Inflation is above target and growth appears resilient. We think that the soft labor market will eventually weaken inflation pressures, so the Fed is making the
right call even though it may not look right from all angles. Also, a tug of war is developing as investors expect the Fed to move more aggressively than what officials signaled with the dot plots.

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