The Fed has once again kept rates unchanged despite a decline in inflation, emphasizing the need for additional data. Powell remained cautious: the regulator seeks confirmation of the trend's resilience before moving towards easing. Meanwhile, political pressure is mounting: Donald Trump is calling for an immediate 2% cut, labeling Powell as 'stupid.' This intensifies the divide between economic pragmatism and populist rhetoric. The Fed forecasts two cuts in 2025, but short-term dynamics indicate a possible delay.
Do I expect rate cuts this year? Given the Fed's restraint and data uncertainty, the first cut is likely not to occur before fall. As long as the regulator does not see a sustainable slowdown in inflation, the pause is likely to continue.