Economic Indicators and Fed's Stance
The is expected to signal two potential interest rate cuts this year, maintaining a cautious approach as it assesses the economy's response to tariffs and government spending cuts.
Despite recent inflation fluctuations, the Fed has reduced rates thrice since last year, aiming to balance economic growth with price stability. Chair emphasizes a wait-and-see strategy, highlighting the low costs of being cautious.
Market Expectations and Economic Projections
Markets anticipate a 99% probability that the Fed will maintain the current interest rates, with a possible cut in June. This reflects uncertainty over the economic impact of tariffs and the Fed's dual mandate of stable prices and maximum employment.
Economists and analysts are divided on the timing and extent of future rate cuts, with some forecasting a single cut in 2025 and others seeing the potential for more aggressive cuts based on economic data.