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The late Paul Volcker was dubbed the “dragon slayer” for conquering inflation as the Federal Reserve’s chair in the 1980s. The central bank’s current chief, Jerome Powell, is yet to defeat his mythical beast — and Wall Street is getting worried.Powell warned on Wednesday that the Fed’s fight against inflation isn’t over after annualized price growth accelerated to 3.2% in February.It’s not yet clear if the recent string of elevated inflation readings is “more than just a bump” on the path toward the Fed’s 2% target, Powell said. The bank is unlikely to lower interest rates until its target comes closer into view, he added.Powell’s words, and the news that a key manufacturing index expanded last month for the first time since 2022, have reignited inflation fears and tempered hopes that borrowing costs will fall anytime soon.
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Raising the alarmBank of America analysts have suggested that stubborn inflation could mean the Fed doesn’t start cutting rates until March next year.Greenlight Capital’s David Einhorn also told CNBC on Wednesday there might be no rate cuts this year, and said the pace of price increases appears to be …
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