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

Good afternoon. Today is Wednesday, May 7th, and I'm your host, Kim Khan. This is a special Fed edition of Wall Street Lunch.

The Federal Reserve had no surprises for the market as it kept interest rates unchanged at

4.5%. The FOMC members voted unanimously, a possible show of unanimity, and support for

Chairman J. Powell amid pressure from President Donald Trump to lower rates. In the changes in its

statement from March, the FOMC raised a worrying specter of stagflation, adding to the statement

that it judges the risks of higher unemployment and higher inflation have risen. Economist Justin

Wolfer says the Fed didn't use the word stagflation, but that's what it's warning about. Never

a good moment when your central bank says that it's worried about both higher unemployment and

higher inflation. That's a problem

that monetary policy alone can't solve. Janny Fixed Income strategist Guy Labar posted,

Offhand, we cannot recall a precedent for the FOMC formally increasing its risk assessment

on both sides of its mandate, certainly not so starkly. The stagflation worries hit stocks initially,

with Treasury yields sliding at the same time, but Powell stepped up to the mic and seemed to

allay some concerns by giving perhaps his most boring press conference ever. Powell

channeled former Fed Chief Alan Greenspan's talent of speaking a lot and saying nothing. The one message

from this hour of Q&A was,

wait and see. He said the F1C is in a good position to be patient and see where tariffs land,

with the cost of waiting fairly low and everyone on the committee supporting waiting.

There's so much uncertainty. Everyone is just waiting to see how developments play out,

he added. Powell acknowledged weakness and sentiment

that has followed the broad implementation of tariffs, but also pointed out that it's not

...