💸 The Fed's balance sheet has shrunk by $183 million in one week!

▪️ Waller, Fed Chairman:

— PCE inflation in March: core — 2.3%, expanded — 2.7%.

— Tariffs can quickly lead to increased unemployment.

— There is a risk that the Fed's reaction will be delayed if we rely only on data.

— A reduction in the rate is possible if unemployment increases.

— Tariffs will have a temporary impact on prices, but slowing demand could smooth out the effect of inflation.

▪️ Daly, Fed Chairman:

— The economy is generally healthy, but some sectors are slowing.

— I support a gradual and cautious reduction in the rate.

— The current policy is restrictive and effective, inflation expectations are around 2%.

— The neutral rate may be higher than before, and the Fed should take this into account.

— The balance can be reduced, but it is still far from the “sufficient” level of reserves.

▪️ Goolsbee, Fed Chairman:

— Short-term inflation expectations have increased, but the key is to maintain long-term stability.

— The impact of tariffs on the macroeconomy may be modest, but it is too early to draw conclusions.

— The Fed must wait and watch.

— The rate will be lower in 12–18 months.

— Intervention in the monetary policy may increase inflation.

▪️ Kugler, Fed Chairman:

— Inflation rates have declined, but are still above the 2% target.

— Public confidence and inflation expectations are still stable.

▪️ Hammack, Fed Chairman:

— The Fed needs to be patient, it's too early to act in May.

— Huge uncertainty is forcing businesses to slow down investments.

— The Fed will intervene only in the event of real shocks; the bar is currently very high.

📌 Market expectations ( #FED ):

- May 7: PAUSE.

- June 18: a decrease of 25 bps to 4.00-4.25%.

- July 30: a decrease of 25 bps to 3.75-4.00%.

- September 17: PAUSE.

- October 29: a decrease of 25 bp to 3.50-3.75%.

- December 10: a decrease of 25 bp to 3.25-3.50%.

- January 28: PAUSE.