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Political Risks at the Fed May Lead to Uncertainty in Inflation and Increased Borrowing Costs
Summary: According to sources, as reported by FXStreet, UBS stated that Federal Reserve Chairman Powell's speech at Jackson Hole signaled an increased probability of a rate cut in September, but lacked guidance on medium-term policy framework. UBS pointed out that Powell did not strongly defend the Fed's independence, and a politically influenced Fed in the future ...
According to sources, as reported by FXStreet, UBS stated that Federal Reserve Chairman Powell's speech at Jackson Hole signaled an increased probability of a rate cut in September, but lacked guidance on medium-term policy framework. UBS pointed out that Powell did not strongly defend the Fed's independence, and a politically influenced Fed in the future could reignite uncertainty in inflation, increase actual borrowing costs by 1 percentage point, and have ripple effects on fiscal policy and household savings.
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Link: Political Risks at the Fed May Lead to Uncertainty in Inflation and Increased Borrowing Costs [Copy]
