TechFlow news, on March 20, according to Jinshi Data report, Barclays economists said in a report that Fed Chair Powell's characterization of tariff-related price pressures as "transitory," along with his dismissal of inflation expectations, could take the Federal Reserve by surprise—just as it did during the pandemic. On Wednesday, Powell clearly stated that the committee assumes tariff-driven price pressures will be temporary, although it maintains a "wait-and-see" stance on whether these pressures will indeed play out this way.
Barclays said: "His tone seems overly confident." The bank added that Powell also appears reluctant to consider preemptive rate cuts even if economic conditions deteriorate significantly, which would provide a buffer for the economy. Weak data indicators such as consumer confidence point toward such risks.
They further noted that downplaying these risks could undermine the Fed's credibility, as the central bank appears to be walking an extremely narrow path, with dual risks at every step.
