Central Banks
Fed Seen on Sidelines for Now as Volatility Roils Global Markets
One development that could spur the Fed into action would be any indication that Treasury markets, or other key parts of the financial system, are not functioning well.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
Massive volatility in financial markets triggered by President Donald Trump’s burgeoning trade war has raised speculation the Federal Reserve may intervene to stem the losses. Don’t count on it, several Fed watchers said.
With inflation still running above the US central bank’s target and levy-induced price hikes on the horizon, economists and market analysts said they believe Fed officials will wait for the impact to hit the real economy before they lower interest rates. That could take months to show up in official data.