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“People are coming back to reality that the world is still a very uncertain place,” she said.
A speech by Mr. Powell, at a gathering of central bankers in Jackson Hole, Wyo., could help clarify the Fed’s expectations for inflation. Economists and market watchers will be listening for clues on whether the Fed will make another three-quarter-point increase in interest rates at its September meeting or go with a more modest half-point increase.
Monday’s trading reflected worries that policymakers might choose the former possibility. Large jumps in borrowing costs help contain inflation by slowing the economy, but they also make it harder for companies to grow their businesses and more expensive for consumers to borrow and spend.
On Monday, a survey from the National Association for Business Economists showed that nearly three-quarters of corporate economists were skeptical that the Fed could reach its 2 percent inflation target in the next two years without bringing on a recession. Fifty-two percent of respondents said they were “not very confident” in the Fed’s efforts to fight inflation, and 21 percent said they were “not at all confident.”
“The concern is that the Fed is now going to go out of their way to remind people that they’re still going to hike rates,” Ms. Greene said.
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