Bank of America: Oil Price Shock May Push Up Fed Inflation Forecasts, Powell to Emphasize Wait-and-See

Odaily According to Bank of America, the Federal Reserve will have to contend with another supply shock—soaring oil prices. The Summary of Economic Projections (SEP) released ahead of the March Fed meeting is likely to see upward revisions to both headline and core inflation forecasts. Bank of America's report stated: "If longer-term growth expectations are also revised higher, we expect the median dot in the longer-term rate dot plot could shift up slightly." Under such circumstances, the bank believes Fed Chair Powell may acknowledge the risk of stagflation while emphasizing a wait-and-see approach. (Jin10)