Fed Policy Debate to Shift Decisively Away From Cuts -- Market Talk

Dow Jones14:04

0604 GMT - The Federal Reserve is set to keep interest rates unchanged Wednesday, but the policy debate is shifting decisively away from cuts, Generali Investments' Paolo Zanghieri says in a note. "Firmer inflation data make an easing bias very hard to defend," the senior economist says. The core PCE is unlikely to fall below 3% on-year soon, while higher energy prices could keep headline inflation elevated and spill over into core, he says. The labor market has stabilized, calling for some offset of last year's insurance cuts, while inflation risks dominate. "The Fed is then likely to sound more hawkish, drop its easing bias and give less forward guidance." The dot plot will be central, as more members may show no cuts in 2026, he says. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

June 16, 2026 02:04 ET (06:04 GMT)

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The labor market has stabilized, calling for some offset of last year's insurance cuts, while inflation risks dominate. \"The Fed is then likely to sound more hawkish, drop its easing bias and give less forward guidance.\" The dot plot will be central, as more members may show no cuts in 2026, he says. 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The core PCE is unlikely to fall below 3% on-year soon, while higher energy prices could keep headline inflation elevated and spill over into core, he says. The labor market has stabilized, calling for some offset of last year's insurance cuts, while inflation risks dominate. \"The Fed is then likely to sound more hawkish, drop its easing bias and give less forward guidance.\" The dot plot will be central, as more members may show no cuts in 2026, he says. (emese.bartha@wsj.com) \n</p>\n<pre style=\"white-space: pre\">\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  June 16, 2026 02:04 ET (06:04 GMT)\n</p>\n<p>\n  Copyright (c) 2026 Dow Jones &amp; Company, Inc.\n</p>\n</font>\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"USHY","symbol_name":"iShares Broad USD High Yield Corporate Bond ETF","start_time":0,"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","article_id":"2643360107","we_media_id":"106","thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2643360107","pubTimestamp":1781589840,"columns":[],"sourceInfo":null,"weMediaInfo":{"media_name":"Dow Jones","introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"summary":"0604 GMT - The Federal Reserve is set to keep interest rates unchanged Wednesday, but the policy debate is shifting decisively away from cuts, Generali Investments' Paolo Zanghieri says in a note. \"Firmer inflation data make an easing bias very hard to defend,\" the senior economist says. The core PCE is unlikely to fall below 3% on-year soon, while higher energy prices could keep headline inflation elevated and spill over into core, he says. The labor market has stabilized, calling for some offset of last year's insurance cuts, while inflation risks dominate. \"The Fed is then likely to sound more hawkish, drop its easing bias and give less forward guidance.\" The dot plot will be central, as more members may show no cuts in 2026, he says. 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The core PCE is unlikely to fall below 3% on-year soon, while higher energy prices could keep headline inflation elevated and spill over into core, he says. The labor market has stabilized, calling for some offset of last year's insurance cuts, while inflation risks dominate. \"The Fed is then likely to sound more hawkish, drop its easing bias and give less forward guidance.\" The dot plot will be central, as more members may show no cuts in 2026, he says. 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