Bloomberg Surveillance · Wednesday, July 1, 2026
Lindsey Piegza of Stifel discusses the Federal Reserve's policy stance amidst elevated inflation. While acknowledging a stronger than expected economic growth and labor market, she expresses concern over persistently high inflation. Piegza notes Fed Chairman Walsh's more neutral tone, suggesting a potential steer towards lower rates long-term but a near-term acknowledgment of inflation's impact. She forecasts nonfarm payrolls to increase by 120-125k and the unemployment rate to remain steady at 4.3%.
“Well, I don't know if it's necessarily gloom, but I think there's a lot of reason to be concerned when you're talking about potentially tackling dangerously elevated inflation at this point. Now, we did see a stronger than expected pace of growth at the start of the year. We are seeing slightly better than expected conditions in the labor market. We have started to see some momentum in inflation cool but there's still a lot of concern and a lot of conditions that the FED needs to be aware of and adjust policy appropriately to keep inflation in check.”
“Well, one of the things that I took away was he took a much more neutral stance. There was a much more neutral tone than I think the market had originally been pricing in. In terms of that shift from a previous inflation hawk to now aligning himself with the administration calling for a regime change and a markedly lower level of policy.”
“Well, I do expect payrolls to increase a lesser one hundred and twenty hundred and twenty five thousand, So it's still a very positive, very solid number, but slower than what we saw in may the unemployment rate likely to remain steady around that four point three percent rate as it has been now for the past four consecutive months, and average hourly earnings really remaining around that three and a half percent annual mark.”