The result of the early morning meeting is basically "as expected":
🔹 Interest rates remain unchanged, no rate cuts in the short term
🔹 Still expected to cut rates twice this year, totaling 50 basis points
No surprises, nor anything scary.
Instead, Trump wants to get involved in everything, complaining that their actions are too slow, and says: Otherwise, should I take charge? 🤡
The Fed will cut rates basically under these three situations:
1️⃣ To preemptively manage risks;
2️⃣ The market crashes and forces action;
3️⃣ Macroeconomic conditions deteriorate comprehensively.
Currently, none of these three conditions are valid, and slowing the pace of rate cuts seems like a reasonable choice.
The market has also gotten smarter, with expectations shifting from "definitely cutting in the first half" to "maybe we'll see in September."
In summary: Rate cuts won't be absent, but don't expect them to arrive early. The Fed is not here to be the firefighter; it is here to maintain order.
When the market comes, those who can hold on will ultimately win.
