NatWest Markets: Fed Will Wait to Act on Inflation

The transcript discusses the Federal Reserve's unexpected changes in the dot plot, indicating potential rate hikes in 2023. It highlights a shift in the FOMC consensus, moving away from Jay Powell's conservative stance. The discussion covers the impact of inflation and economic data on the Fed's patience and risk management. The Fed's focus on financial conditions and economic recovery is emphasized, along with their strategy to avoid surprising markets with tapering and rate hikes.

What are the implications of the Fed's acknowledgment of upside risks to inflation?

What role does financial stability play in the Fed's current decision-making process?

How does the Fed plan to manage market reactions to potential policy reversals?