The Federal Reserve continued to signal it would cut rates of interest two more times this 12 months, with Fed Chair Jerome Powell adopting a perceived dovish stance, a nice surprise for investors who got here into Wednesday’s policy decision with heightened fears over “stagflation” and the potential for a US recession.

“It is a clearing event,” Dennis DeBusschere, president of 22V Research, told Yahoo Finance following the choice. “You didn’t get a Fed that was going to speed up the downside in markets.”

Read more: How the Fed rate decision affects your bank accounts, loans, bank cards, and investments

One big reason stemmed from the Fed’s “base case” that tariff-induced inflation shall be “transitory” and have a short-term “one-off” effect on price growth. This was reflected within the central bank’s projections, which forecast year-end PCE inflation rising to 2.7% before reaching its 2% goal by 2027 — “a relief to investors” who had been bracing for stickier prices, in accordance with DeBusschere.

But some experts warn that “transitory” inflation stays an unrealistic expectation — and that the projections for 2 rate cuts this 12 months could unravel because the Trump administration continues to flip-flop on trade policy. Powell himself said “there’s a level of inertia” to remain consistent with prior forecasts until greater clarity emerges.

“Uncertainty was a highlight of the statement,” Rick Rieder, chief investment officer of world fixed income at BlackRock, wrote in response to Wednesday’s decision. “Like market participants, the Fed is at a highly uncertain point, and it’s in need of time and data to find out the subsequent plan of action.”

Each consumer and producer inflation showed a deceleration in price growth over the month of February. But details under the surface pointed to a possible stalling out in reaching the Fed’s 2% goal, with tariffs serving as the best threat to Powell’s “transitionary” base case.

There are also concerns the Fed may cut rates due to a weakening labor market and slowing economic growth — a move that would not be cheered by investors.

“Everybody wants two cuts, three cuts, 4 cuts. You do not need any cuts. You wish earnings growth. You wish a robust economy,” Ken Mahoney, CEO of Mahoney Asset Management, told Yahoo Finance on Thursday. “Watch out what you want for.”

Despite a rather more hawkish tilt from the central bank, with more FOMC members forecasting rates of interest to either hold regular or come down by just 0.25% as a substitute of the consensus 0.50%, traders still boosted their very own expectations of where rates of interest could end the 12 months.