Federated Hermes portfolio manager Karen Manna said the firm still expects the Federal Reserve to largely remain on hold and that inflation remains one of the hardest macro variables to predict. The move from the post-2008 low-inflation regime to pandemic-era inflation was driven by supply-chain disruptions, shifts in consumption and labor-market imbalances; many of those distortions have eased, but new factors — tariffs enacted last year, reduced economic visibility around last autumn’s governm

Federated Hermes portfolio manager Karen Manna said the firm still expects the Federal Reserve to largely remain on hold and that inflation remains one of the hardest macro variables to predict. The move from the post-2008 low-inflation regime to pandemic-era inflation was driven by supply-chain disruptions, shifts in consumption and labor-market imbalances; many of those distortions have eased, but new factors — tariffs enacted last year, reduced economic visibility around last autumn’s government shutdown, elevated energy prices and large AI-related capital expenditures — continue to cloud the outlook. Manna warned disinflation may be more uneven and episodic than in prior cycles, reinforcing the Fed’s cautious, data-dependent approach.