As the Federal Open Market Committee (FOMC) prepares to release its latest policy statement later today, only one thing seems certain - we won't be getting a rate cut to start the month of May. Beyond that, the global economy seems to offer up just about nothing but uncertainties, including geopolitical flashpoints in the Middle East and Eastern Europe, ongoing trade tensions between the U.S. and China, and a mixed bag of data that points to persistently sticky inflation.
Although capital markets have been quite resilient in the face of these onslaughts so far, it's fair to say the Fed's job looks more complicated now than it did at the end of 2023, when consensus forecasts were calling for three rate cuts this year. While investors await fresh clarity from Chair Jerome Powell, the FOMC will no doubt be looking to the economic data for its clues - and suddenly, chatter is growing around the topic of stagflation.
