NEW YORK - Federal Reserve Chairman Jerome Powell's reassuring message following the central bank’s monetary policy meeting may not calm frazzled U.S. stock and bond investors, as uncertainty over the path of inflation intensifies the focus on upcoming data.
“If the Fed is going to be as data-dependent as they claim to be, every data point will be scrutinized by the market to see whether it means higher for longer or the possibility that rate hikes are back on the table,” said Steve Hooker, a portfolio manager at Newfleet Asset Management. “Naturally the market is a little bit cautious ... and is waiting for the data to confirm the Fed’s underlying view that inflation can come down to 2 percent without needing a recession,” he said.
He was also bullish on Treasuries that would likely benefit from a flight-to-quality bid in case “of a stumble in the economy down the road,” he said.
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