TechFlow news, May 16 — According to Jinshi Data, the head of Fidelity's $2.3 trillion fixed income business said that as Trump's trade war upends economic prospects, the Federal Reserve's policymakers are finding their goals of curbing inflation and maximizing employment are "pulling them in very different directions."
Robin Foley said the Fed has done a "decent job" fighting inflation, but the labor market "remains to be seen." She added that the central bank is in a "quandary." Foley made these remarks as the Fed paused its rate-cutting cycle this year—initially expected to begin in 2024—because Trump's tariff hikes could exacerbate inflation and hurt the job market.
Foley noted that over the past year, market participants' expectations for interest rates have undergone "very volatile" shifts. Futures trading suggests investors now expect the Fed to resume rate cuts in September—much later than earlier forecasts at the beginning of the year.
