2024-07-10 08:31:25 ET
Summary
- Fed Chair Powell warns of two-sided risk facing monetary policy: elevated inflation and risk of recession.
- The labor market is already signaling a recession, however, the Fed still sees the labor market as "strong, but not overheated".
- Thus, the Fed is likely to hold interest rates restrictive for longer, until the labor market further weakens, which is likely to cause a deeper recession.
- The S&P500 is facing a recessionary bear market with the bubble bursts - or a deep drawdown.
The two-sided risk
The Fed Chair Powell, in his Semiannual Monetary Policy Report to the Congress on July 9th, warned about the two-sided risk facing the monetary policy implementation at the moment....
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Powell Warns Of A 'Two-Sided Risk', And That's Bad News