Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Wednesday, March 19th, and I'm your host, Kim Khan. This is a special Fed Day edition of Wall Street Lunch.

It's deja vu all over again. Chairman Jay Powell sent Fed Watchers into a frenzy by bringing back the T-word.

After the FOMC kept interest rate steady as expected,

Powell said the base case is that the current uptick in inflation from tariffs will be transitory.

Back in the summer of 2021, Powell made a similar claim in the midst of the COVID spike in inflation.

Core CPI had risen to 4.5% back then, but went on to top out at 6.6% and took two years in a

massive tightening cycle to settle back down below 4%. Economist Mohamed Al-Alarian says the word

transitory is back at the Federal Reserve, as Chair Powell characterizes the

price effects of tariffs as a one-off. I would have thought that, particularly after the big

policy mistake of earlier this decade, and given all the current uncertainties, some Fed officials

would show greater humility, he added. It's simply too early to say with any regressive confidence

that the inflationary effects

will be transitory, especially given that companies and households still have fresh in their

minds the recent history of high unanticipated inflation. Powell acknowledged that a good

part of sticking inflation is tariffs, but the Fed is working on figuring out what are the

tariff and non-tariff parts.

He gave an example of last time around when tariffs were placed on washing machines, where prices went up,

but not on dryers, where prices also went up, as manufacturers just kind of followed the crowd.

Progress on inflation is probably being delayed by tariffs for the time being, he added,

but he did note that the last time there were tariffs, the inflation was transitory, and Core PCE can get into the low twos

in 2026. Pau was asked if inflation was transitory in relation to the new summary of economic

...