Wall Street remained on edge as investors adopted a cautious stance amid an increasingly uncertain economic outlook this past week. At its March meeting, the Federal Reserve kept interest rates unchanged at 4.25%-4.50%, signaling “no rush” to adjust its monetary policy.
Yet, the central bank’s latest economic projections painted a less optimistic picture, with lower growth forecasts and higher inflation expectations for the coming years.
The Fed now expects real GDP growth to slow from its December forecast of 2.1% for 2025 to 1.7%. Growth estimates for 2026 were revised downward from 2% to 1.8%, and 2027 was lowered from 1.9% to 1.8%.
The Personal Consumption Expenditures price index ― the Fed’s preferred inflation gauge — is now projected to hit 2.7% in 2025, up from 2.5% previously. Broader price pressures for 2026 were also revised higher, from 2.1% to 2.3%, signaling persistent inflation risks.
In short, the latest projections suggest a more stagflationary environment — something Fed Chair Jerome Powell had categorically dismissed last year, when he quipped that he saw “no stag, nor flation” on the horizon.
During his news conference, Powell attempted to quell market fears over a potential recession and the inflationary impact of tariffs. He reaffirmed confidence in the U.S. economy, highlighting its resilience and low recession risk, while acknowledging lingering uncertainty in the outlook.
His characterization of President Donald Trump’s proposed tariffs as “transitory” raised eyebrows among economists — particularly given his prior misjudgment in labeling post-COVID-19 pandemic inflation as short lived.
Boeing Co. emerged as the week’s top performer in the S&P 500, surging double digits in its best weekly performance since July 2023. The rally was fueled by a multibillion-dollar contract to design and manufacture a next-generation fighter jet for the U.S. Air Force, beating out rival Lockheed Martin Corp.
Tesla Inc.’s decline persisted, now down more than 50% from peak, marking its ninth consecutive negative week — a record losing streak since the company went public in 2010. In Elon Musk’s empire, SpaceX has now officially overtaken Tesla as his most valuable asset.
Some GM self-driving news
At the GPU Technology Conference, Jensen Huang, CEO of AI hardware and software supplier Nvidia, unveiled a new collaboration with General Motors to advance next-generation self-driving vehicles. This partnership intensifies competition with Tesla in the growing robotaxi market.
Benzinga is a financial news and data company headquartered in Detroit.
