Reaching 2% Inflation Will Be Challenging for the Fed, Feroli Says

Michael Feroli, the chief U.S. economist at JPMorgan, has argued that returning inflation to the Federal Reserve's 2% target will prove difficult, signaling that disinflation may stall short of the goal. The core transmission channel runs through inflation expectations and the policy rate path: if the Fed must hold rates higher for longer to bring price pressures down, the resulting gap between nominal yields and inflation compensation shapes Treasury curve pricing, the dollar, and the discount rates applied to equities. Front-end rate-sensitive instruments such as short-dated Treasuries and fed funds futures are most directly exposed, as they reprice quickly to shifts in the expected policy trajectory, while long-duration equities and rate-sensitive credit face indirect pressure through higher real yields. Traders should watch the next Personal Consumption Expenditures (PCE) price index release, the Fed's preferred inflation gauge, for confirmation of whether core services inflation is sticking above target, alongside the Fed's upcoming policy meeting and updated dot plot projections.

HIGH-impact news is typically a market-moving event with multi-pip or multi-percent intraday reactions. Examples include central bank rate decisions, major CPI/NFP releases, geopolitical shocks, mega-cap earnings beats/misses, and regulatory announcements. Traders typically position-reduce or hedge ahead of scheduled HIGH-impact events, and follow the wire in real time to react to unscheduled ones (war headlines, central-bank emergency statements, surprise corporate actions). The Trading News Terminal squawk box reads every HIGH-impact headline aloud the moment it hits the wire — so active traders don't have to stare at the feed.

Active traders typically follow a three-step workflow when a market-moving headline hits the wire: (1) read the headline on the terminal or hear it on the squawk box; (2) assess whether the news is already priced in (by checking intraday price action in the seconds before) or whether it's genuinely new information; (3) act — either entering a breakout position, fading an overreaction, or tightening stops on existing trades. Trading News Terminal's Pro plan delivers wire-grade headlines within seconds of the source, with automatic audio squawk on every HIGH-impact event, so the read-assess-act cycle never waits on a refresh button.