Senior Macroeconomist Steven Friedman shares his post-FOMC thoughts on monetary policy and economics.     He also meets with portfolio managers mid-cycle to discuss markets and investment opportunities.


 

“Historical data illustrates a more stable distribution of bond returns compared to equities. In our view, bonds are quite resilient and with far less risk relative to equities.”

Steven Friedman, Senior Macroeconomist, Head of the Macro and Quantitative Solutions Team

 

Two Sources of Uncertainty

Chair Powell made clear in his post-meeting press briefing that the Fed will not adjust policy preemptively given the uncertain effects of tariffs on growth, employment and inflation. There is another source of uncertainty for investors, however: how the Fed will react to economic outcomes that are likely to create tensions for monetary policy, namely, weaker growth and employment on the one hand, and higher inflation on the other. We believe there is an opportunity for the Committee to more clearly articulate its framework for adjusting policy in such a scenario.