"Federal Reserve warns of potential recession as inflation remains stagnant"

Federal Reserve Chair Jerome Powell stated that the US is unlikely to reach its 2% inflation target until at least 2025, indicating that the central bank's fight against inflation is ongoing and suggesting the possibility of more interest-rate hikes. This news is concerning for stock markets, which have rallied on expectations of the Fed ending its tightening campaign. The Fed has raised rates by 500 basis points since early 2022 to curb inflation, and Powell's remarks indicate that the battle against inflation is far from over. Higher borrowing costs can dampen spending and investment, impacting company profits and potentially leading to an economic downturn.