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Bank of America: Oil Price Shock May Push Up Federal Reserve Inflation Forecasts; Jerome Powells Will Adopt a Wait-and-See Approach
Svmuu News: Bank of America stated that the Federal Reserve will have to contend with another round of supply shocks—soaring oil prices. In the Summary of Economic Projections (SEP) released ahead of the March Federal Reserve meeting, forecasts for overall and core inflation are likely to be revised upward.Bank of America reported: “If long-term growth expectations are also raised, we expect the median long-term interest rate in the dot plot to shift slightly higher.” In this scenario, the bank believes Federal Reserve Chair Jerome Powell may acknowledge the risk of stagflation while emphasizing a wait-and-see approach. (Jinshi)
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