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The Fed’s many challenges

Matthew Luzzetti

Matthew Barnard

In this episode
With the Fed trying to achieve a soft landing for an economy weathering both high inflation and geopolitical upheaval, Deutsche Bank Research has adjusted its forecasts for rate increases and balance sheet reduction. Matthew Luzzetti, Chief US Economist, speaks with Matthew Barnard, Director of North American Equity Research, and details the numerous challenges facing the Fed as it attempts to delicately thread this policy needle.

The Fed’s many challenges
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What we discuss 
  • How are recent geopolitical events likely to impact the Fed’s policy decisions this year?
  • Despite very elevated inflation, long-term inflation expectations are still well anchored. Could recent energy price developments change this picture?
  • The US hasn’t experienced stagflation since the 1970s, but that now looks like a real risk. Is this something we should worry about?
  • Amalgamating all these elements, how could this play out from a policy perspective – and how does it affect our forecasts for Fed rates and the balance sheet?


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