Allison Boxer
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Mounting risks to growth and inflation have the Federal Reserve taking a cautious approach to monetary policy.
Fed Sees No Need to Hurry
Facing an uncertain outlook, the Federal Reserve holds rates steady and signals a watch-and-wait approach.
Macroeconomic uncertainties prompted the Federal Reserve to signal a slower pace of policy rate cuts in 2025 and beyond.
Recent economic data support the Federal Reserve’s meeting-by-meeting approach to rate cuts.
Starting With a Bang: Fed Cuts Policy Rate
We believe the Fed is on a path to continue to cut rates over the next several meetings to realign monetary policy with a now more “normal” U.S. economy.
The central bank’s latest policy statement and Chair Jerome Powell’s remarks suggest that an initial interest rate cut could come as soon as September.
A second straight month of encouraging U.S. core CPI data supports an initial Federal Reserve rate cut as early as September.
Good news on U.S. inflation in May did not sway the Federal Reserve to signal interest rate cuts could come sooner.
Regardless of the U.S. presidential election’s outcome, the budget deficit will likely remain high, but market confidence in U.S. Treasuries is expected to remain stable.