Federal Reserve Chairperson Jerome Powell: The impact of tariffs will depend on their level, and this year's tariff increases could weigh on economic activity and drive up inflation.
The Federal Reserve has taken a widely expected "wait and see" approach to interest rates as uncertainty around tariffs persists and the U.S. labor market remains strong, according to analyst Matthias Scheiber. From our perspective, the next possible window for the Fed to cut rates will be September. We expect the Fed to cut rates twice this year if inflation continues to fall to its 2.0% target. "We expect stock market performance to continue to be volatile,...
In the June dot plot, Fed officials lowered their expectations for the number of rate cuts by the end of 2027. Even so, with the release of the dot plot, the yield on the two-year Treasury note, which follows the Fed's policy expectations, fell slightly. Traders may be reacting to Fed officials' forecasts for slower economic growth, compared with March estimates. The Fed now expects growth of 1.4 per cent this year and 1.6 per cent next year, compared with March forecasts of 1.7 per cent and 1.8...
With the dot plot largely unchanged, the Treasury market is likely to appear relatively constrained, at least until Powell speaks, market analysts said. We don't think the economic forecasts themselves are dovish, but only in comparison to most expectations. That's in line with our expectations, at least at this meeting.
The median value of the Federal Reserve's June dot matrix shows that the Federal Reserve expects to cut interest rates twice in 2025, 25 basis points each time, consistent with March expectations. It is expected that interest rates will be cut once in 2026, 25 basis points each time, a decrease from the two times in March. It is expected that interest rates will be cut once in 2027, 25 basis points each time, consistent with March expectations.
U.S. interest rate futures prices reflect a 71% probability that the Federal Reserve will cut rates in September, compared with 60% before the statement. The probability of a rate cut in October rose to 85%, compared with 80% before the statement.
Nick Timiraos, the "Federal Reserve mouthpiece", wrote that the Federal Reserve left interest rates unchanged this time, leaving the possibility of a rate cut in the second half of this year. To resume the rate cuts that began last year, Fed officials may need to see a softening of the labor market or stronger evidence that price increases caused by tariffs will be relatively mild. The forecasts released show that officials are open to whether evidence can be obtained before the autumn. The new ...