The Questionable Return Of Transitory Inflation

2025-03-22 02:20:00 ET

Summary

• At Wednesday afternoon’s press conference following the two-day conclave of the FOMC, Fed chair Powell repeatedly invoked two words. Those words were: uncertainty, and transitory.
• Even if the additional inflation created by higher tariffs is transitory – according to the FOMC’s own economic projections released on Wednesday – that two percent target is unlikely to be reached before 2027.
• The stock market’s hot take from the Wednesday afternoon press conference leaned dovish, meaning more attention paid to “transitory” and less to “uncertainty”.

At Wednesday afternoon’s press conference following the two-day conclave of the Federal Open Market Committee (FOMC), Fed chair Powell repeatedly invoked two words. Those words were: uncertainty, and transitory. Uncertainty, as it pertains to the inability to make informed decisions about anything when variables like tariff policy change on a near-daily basis....

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