A take on the Federal Open Market Committee (FOMC) from Goldman Sachs Asset Management:
- The Federal Reserve struck a “cautious tone” at its latest policy meeting, opting to remain “on hold” as it assesses the U.S. growth outlook and evolving trade policies
- Revisions to FOMC members’ projections “had a somewhat ‘stagflationary’ feel, with forecasts for growth and inflation moving in opposite directions,”
- “For the time being, the Fed is in wait-and-see mode, as it monitors whether the recent growth slowdown develops into something more serious.”
Dow Jones / Market Watch with the info.
FOMC wrap up here:
***
Stagflation is an economic condition characterized by the unusual combination of slow or stagnant economic growth, high unemployment, and persistent inflation.
Typically, inflation and growth move together—when the economy slows, inflation tends to ease—but stagflation defies this pattern, creating a challenging environment for policymakers. It can be triggered by supply shocks (such as jumping oil prices) or poor economic policies, making it difficult for central banks to respond effectively since measures to control inflation (like raising interest rates) can further weaken growth. The most notable example of stagflation occurred in the 1970s, when oil price spikes and monetary policy missteps led to high inflation alongside sluggish economic performance.
