This podcast discusses the March Federal Open Market Committee meeting and the implications for future interest rates. The hosts analyze the Fed's revised economic projections, noting downward revisions to growth and upward revisions to inflation, creating a stagflationary outlook. The discussion centers on the Fed's increased uncertainty regarding both inflation and growth, and the resulting policy implications, with a focus on the likelihood of future rate cuts. A key takeaway is that while the Fed might aim to "look through" near-term inflation, the panelists express doubt about the feasibility of this approach, suggesting that market pricing of rate cuts may be overly optimistic. The impact of equity market declines on Fed policy is also considered, with a suggestion that a significant (30%) decline might be necessary to trigger a policy response.
