A paradoxical thing is happening: Jerome Powell is not declaring victory over inflation at all at the end of the U.S. Fed meeting. But the markets are celebrating a victory – the S&P 500 is up 3%.
In principle, nothing new was said at the press conference. There will be no policy loosening, no sign of lower inflation, but slowing interest rates makes sense. That’s exactly what was said last time.
Truly, the world economy is a market of expectations. Just a hint that things aren’t disgusting, just bad – investors are assured of their victory. And on top of everything else, Powell said that the final rate will be higher than planned in September.
All in all – inflation is still the world’s biggest problem from an economic standpoint. It will definitely be around for a couple of years.
