Rising inflation and slowing spending could trouble the Fed, leading to potential market volatility.

From Investing.com: 2025-03-28 11:28:00

President Trump’s aggressive moves on tariffs and government spending cuts are intensifying hot inflation and cooling consumer spending, raising stagflation fears. The Federal Reserve’s inflation measure, the deflator, came in higher than predicted at 0.4% month-on-month, while real consumer spending was softer at just +0.1% MoM. The concern is that tariffs threaten higher prices, keeping inflation hot and constraining the Fed’s ability to cut rates. Fed Chair Powell’s dismissive attitude towards this narrative may change next week as sentiment plunges and spending cools. Expectations of downward revisions to first quarter forecasts are high, setting up a volatile week for markets.



Read more at Investing.com: US Inflation Surprises to the Upside as Spending Cools: Trouble Ahead for the Fed