Fed Might Focus More on Growth Drivers Once Geopolitical Tensions Ease -- Market Talk

Dow Jones13:49

0549 GMT - The Federal Reserve is expected to examine the underlying drivers of growth more closely once geopolitical tensions ease, says LPL Financial's Jeffrey Roach in a note. Attention may turn to whether business investment--especially in AI-related infrastructure--is generating sustained momentum rather than a temporary cycle boost, the chief economist says. "Capital spending tied to data centers, semiconductors, and digital infrastructure has emerged as a key support for productivity and potential output, suggesting growth could remain near trend even amid tighter financial conditions," he says. If these investments translate into measurable productivity gains, the Fed may view this expansion as more durable and less inflationary, shaping a more balanced policy response over time, he says. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

June 23, 2026 01:49 ET (05:49 GMT)

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