1. Fed lowers U.S. growth forecast to 1.7% from 2.1%. 2. Inflation outlook raised to 2.8% amid economic slowdown fears. 3. Stagflation risk increases due to rising tariffs impacting consumer spending. 4. Two rate cuts expected in 2025 despite heightened inflation projections. 5. Key interest rate remains unchanged, with mixed FOMC outlook.
The downgrade in economic growth and increased inflation expectations suggest weakening consumer confidence, leading to a bearish outlook. Historical precedents, like the 1970s stagflation, show significant market tensions under similar conditions.
The article touches on critical factors affecting economic conditions directly tied to the S&P 500, making its potential impacts significant yet balanced by projections of future rate cuts.
Immediate market reactions are expected due to heightened uncertainty over growth and inflation. The influence of Fed policies typically manifests quickly, especially with investor sentiment shifting.