Support for Powell? Goldman Sachs explains in detail why the University of Michigan's inflation expectations are "unreliable".
Goldman Sachs stated that there are significant design flaws in the survey, with a small sample size and few respondents. Political bias and changes in survey methods exacerbate the deviation in inflation expectations, and the survey is particularly susceptible to the influence of tariff news. Goldman Sachs also believes that Federal Reserve officials will not be intimidated by claims of "tariffs causing runaway inflation," and that this year's rise in inflation will not last beyond 2025.
Risk appetite continues to cool! USA inflation resurfaces combined with a tariff storm, Crediting panic rises to a seven-month high.
Inflation data and tariffs are important factors triggering panic in the Crediting market.
Core PCE in the USA unexpectedly accelerated, and persistent inflation data continues to test interest rate cut expectations.
The USA's PCE price Index rose 0.3% month-on-month in February and 2.5% year-on-year, in line with expectations. The core PCE price Index grew 0.4% month-on-month, with the year-on-year growth rate accelerating from 2.7% to 2.8%, exceeding expectations by 0.1 percentage points; The inflation rate in the USA remains high, and previous Federal Reserve Chairman Powell emphasized that interest rate cuts will be more cautious.
The Federal Reserve's favorite inflation Indicators rebounded! The USA's core PCE for February is 2.79% year-on-year, but personal spending has hardly grown.
The report has sparked concerns about stubborn inflation and potential stagflation, as traders continue to bet on the Federal Reserve cutting interest rates in July.
Federal Reserve's Barkin: Policy uncertainty suppresses demand, the current MMF policy stance is appropriate.
During an economics lecture at Lee University in Washington, Richmond Fed Chairman Barkin on Thursday (March 27) used "dense fog" to metaphorically describe the current exceptionally complex policy environment, emphasizing that high uncertainty is suppressing both business and consumer demand. He noted that the Fed's current "moderately restrictive" MMF policy is in a favorable position to respond flexibly, but warned that the rapid changes in tariff and tax policies under the Trump administration are creating a decision-making dilemma that renders visibility "zero." 1. The impact of tariff policies on economic expectations. Although Barkin did not directly comment on the 25% auto tariffs proposed by Trump, he acknowledged that the new government's tariff measures could push up inflation while emphasizing the impact.
As Trump distances himself from Western allies, Deutsche Bank warns that the dollar's status may face significant risks.
①Deutsche Bank warns that if the Federal Reserve withdraws liquidity support, it will pose the greatest risk to the dollar's status as a reserve currency since World War II; ②Sarevelos points out that even if the Federal Reserve does not take action, concerns about the reliability of swap lines may harm the dollar's status and accelerate the Global process of de-dollarization.