Edgar Peters, chief investment officer for PanAgora Asset Management, told CNBC’s “Morning Call” that the Federal Reserve now believes it can tolerate inflation as long as there is economic growth.
“They’re gambling on a soft landing, something the Fed has been able to engineer only once in its entire history,” Peters said Thursday.
“With full employment the way it is, and the fact that core inflation is roughly where it was two years ago and the fact that they’re not considering any tightening -- just staying on hold at this point -- shows that they’re more concerned about economic growth than they are about inflation," he said. "If that’s the case, that would have severe implications for the bond market.”