FED

The U.S. Federal Reserve (Fed) isn’t planning to cut interest rates anytime soon — and according to most economists, no change is likely before September, possibly even later. Despite political pressure and mounting inflation concerns, monetary policy remains frozen as the central bank stays cautious.

🔒 Rates Stay at 4.25%–4.50% — No Surprises in June
In a Reuters survey conducted from June 5–10 with 105 economists, nearly all (103) agreed that the Fed would leave rates unchanged at the upcoming June 17–18 meeting. The current rate range has remained the same since the beginning of the year — 4.25% to 4.50%.
The primary reasons? Persistent inflationary pressure and a resilient job market that doesn’t yet warrant Fed intervention.

🧨 Trump’s Tariffs and Fiscal Uncertainty Add to the Risk
Economic uncertainty is being fueled by unresolved trade tensions and tax reform efforts. President Donald Trump raised tariffs on steel and aluminum from 25% to 50%, stoking fears of prolonged inflation. Meanwhile, a new tax bill, which passed the House of Representatives, is still stuck in the Senate.
Trade negotiations with China have stalled, and the 90-day tariff truce set to expire on July 9 shows no signs of resolution.

📉 Trump Wants Rate Cuts — But Fed Holds Its Ground
Trump has called for a full percentage point cut, which would lower the Fed’s target rate to 3.25%–3.50%. Still, the Fed is holding firm and refuses to act under pressure.
As Jonathan Pingle, Chief U.S. Economist at UBS, put it:
“As long as the job market holds up, the Fed will stay put and lean on rhetoric to maintain credibility in its fight against inflation.”

📊 Most Economists: No Cuts Until Q3 2025 at the Earliest
According to the Reuters survey:

🔹 59 economists expect rate cuts in Q3 2025

🔹 44 economists predict a cut in Q4 or later

🔹 20 economists believe there will be no cut at all this year

💸 Inflation and National Debt Still Weigh Heavily
Inflation remains sticky, and U.S. federal debt has ballooned to $36.2 trillion. A new tax-and-spending package making its way through Congress could add another $2.4 trillion. These fiscal pressures are pushing long-term interest rates higher, directly impacting housing and business investment.
Bill Adams from Comerica Bank explained:
“With more fiscal stimulus on the way, the Fed has no reason to boost the economy with lower rates. Deficits are rising, and long-term yields are being pushed up, straining interest-sensitive sectors like real estate and business capex.”

📉 Weak GDP Growth, No China Deal, and Persistent Inflation
U.S. GDP shrank 0.2% last quarter, driven by a widening trade deficit. Growth for the full year is now expected to hit just 1.4%, down from 2.8% in 2024. The 2026 forecast is only slightly better — 1.5% — and hasn’t changed since May.
Although U.S. officials are negotiating with China in London, no deal is expected before the tariff freeze expires. In the meantime, both economists and consumers are preparing for persistently high prices.
Inflation expectations remain well above the Fed’s 2% target, and no one expects that to change before 2027.

📌 In Summary: The Fed Is in No Hurry — and That’s Not Changing Soon
Of the 105 economists surveyed, 85 expect rates to remain at 3.75%–4.00% through the end of 2025. The Fed appears to be in wait-and-see mode, with no incentive to move until something dramatic changes.
For now, the central bank is watching and waiting — and likely will be for a while.

#Fed , #TRUMP , #Tariffs , #worldnews , #FederalReserve

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Tensions are rising once again behind the scenes of U.S. politics – former President Donald Trump is reportedly considering replacing Federal Reserve Chairman Jerome Powell. According to sources close to Trump’s team, current Treasury Secretary Scott Bessent is a leading candidate for the job. While formal interviews haven’t started yet, Trump’s advisors are said to be heavily pushing for Bessent’s nomination.

Race for the Fed: Bessent vs. Warsh
Powell’s term doesn’t end until May 2026, but Trump has hinted that he will announce a successor “very soon.” While Kevin Warsh, a former Fed board member, was interviewed for the role back in November 2024, Bessent’s name is now being discussed with equal – if not more – seriousness.
Bessent currently heads Trump’s economic team and plays a key role in overhauling trade policy, reforming taxes, and cutting back federal regulations. As Treasury Secretary, he would typically help select the next Fed Chair – but now, he might end up taking the job himself.
When asked about the possibility by reporters, Bessent smiled and said: “I have the best job in Washington. It’s the President’s decision to choose what’s best for the economy and the American people.”

Bessent’s Star Is Rising
Tim Adams, president of the Institute of International Finance, called Bessent a strong candidate who enjoys a high level of trust among global financial leaders. He referred to Bessent as a “dark horse” in the race but acknowledged his growing momentum. Warsh, however, remains a serious option – Trump recently stated he has “great respect” for him.
Bessent is also directly involved in negotiating a new trade deal with China, which is a top priority in Trump’s global economic reset. His leadership is praised by former White House chief strategist Steve Bannon, who said: “Bessent isn’t just a cabinet star, he’s a safe hand for global capital markets.”

Trump’s Frustration with Powell Grows
Trump has long criticized Powell, whom he nominated in 2017, for being too cautious with interest rate cuts. Despite economic uncertainty, the Fed has held rates steady through 2025 – a decision Trump recently challenged during a meeting with Powell at the White House.
Fed officials argue the pause is necessary due to inflation risks, particularly from Trump’s evolving tariff strategy. They warn that new tariffs could slow growth and push consumer prices higher, calling for a more cautious approach.
Trump disagrees, claiming the Fed is making a mistake. He has also expressed the belief that presidents should have more influence over monetary policy – raising concerns about the Fed’s independence under new leadership. Whoever replaces Powell will need to prove they’re not a puppet of the White House.

Other Names in the Mix
Besides Bessent and Warsh, other potential candidates are being floated within Trump’s inner circle:
🔹 Kevin Hassett – Head of the National Economic Council

🔹 Christopher Waller – Current Fed Governor

🔹 David Malpass – Former World Bank President during Trump’s first term
Despite Bessent’s strong global financial relationships, some experts point out that monetary policy isn’t his primary area of expertise. Economist Arthur Laffer, a longtime Trump ally, said: “Bessent is great, but he already has a job. Warsh is simply perfect for this role.”
So, who will ultimately take the Fed’s top seat? The decision is expected soon – and it could reshape not only U.S. monetary policy but also financial markets worldwide.

#TRUMP , #Fed , #FederalReserve , #USPolitics , #TradingCommunity

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Financial markets are bracing for the upcoming Federal Reserve’s June FOMC meeting, but hopes for a rate cut have nearly vanished. The odds of the Fed lowering rates have dropped to just 0.1%, signaling near-unanimous market belief that rates will remain unchanged.

🔹 Probability of Steady Rates? 99.9%
According to the CME FedWatch Tool, investors are overwhelmingly betting that the target range will stay between 425 and 450 basis points. This sentiment is echoed by Polymarket, where traders have drastically shifted expectations. In May, there was still a 9% chance of a cut, but that has now shrunk to almost zero.

🔹 Labor Market & Inflation Data Crush Expectations
Recent strong U.S. job data and persistently high inflation have convinced the Fed there's no reason to rush. According to the latest FOMC minutes, central bankers remain extremely cautious, while monitoring both geopolitical and fiscal developments — including Trump’s tariffs.

🔹 Trump Pushes Aggressively for Cuts
While the Fed remains on hold, calls for cuts are growing louder. Donald Trump is demanding an immediate 100-basis-point rate cut, calling it rocket fuel for the economy. In his usual style, he lashed out at Fed Chair Jerome Powell, calling him a “disaster.”
Trump also hinted that he may soon replace the Fed Chair. According to Polymarket betting odds, the leading candidate to succeed Powell is Kevin Warsh, a former member of the Fed’s Board of Governors.

Even with mounting political pressure, the market consensus is clear: a June rate cut is highly unlikely. For now, all eyes are on upcoming CPI inflation data, which could determine whether the Fed shifts its stance before summer ends — or if rate changes will be postponed until fall.

#Fed , #JeromePowell , #centralbank , #worldnews , #USDOLLAR

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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“