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Why the market is more sensitive to this latest showdown between Trump and Fed chief Jerome Powell
Yahoo Finance· 2026-01-12 14:31
Group 1 - Less than 12% of respondents in a survey identified an AI bubble as a major risk to sustained market growth, while over a third expressed concerns about an economic downturn [1] - The political environment was a significant concern for 22% of respondents, with 19.4% worried about persistent inflation [1] - The political environment includes various factors such as geopolitical issues, domestic stress, and government intervention in markets [2] Group 2 - Market anxiety has increased due to a criminal investigation into Federal Reserve Chair Jerome Powell, which is linked to his resistance to President Trump's push for looser monetary policy [3][4] - Investors are concerned about the implications of this investigation on the Fed's ability to set interest rates based on economic conditions rather than political pressure [4][5] - Rising Treasury yields are pressuring stocks as investors seek higher returns to compensate for the perceived risks associated with the conflict between the administration and the central bank [5][7]