❌ Why the Fed Might Not Cut Rates (or Cut Later Than Expected):
1. Inflation hasn’t cooled consistently
While CPI has dropped somewhat, core inflation (excluding food and energy) is still above the Fed's 2% target.
The PCE, the Fed's preferred measure, also hasn’t shown a stable downtrend.
2. Labor market remains strong
Unemployment is low, and job demand is still high.
As long as the labor market stays strong, the Fed feels less pressure to ease.
3. Markets are expecting too many cuts too soon
The Fed may want to counter this over-optimism by maintaining a "hawkish pause" — neither raising nor cutting, to keep expectations in check.
4. It's an election year, but the Fed is independent
Some believe the Fed will cut before the U.S. elections, but the Fed usually ignores political pressure and focuses strictly on economic data.
5. “Higher for longer” policy
Several Fed officials have recently stated they might need to keep rates higher for a longer period to ensure inflation stays down.
🧠 Bottom Line:
Your statement — “I don’t think they’ll cut” — matches the view of many professionals.
Unless inflation drops clearly and sustainably, or the economy weakens sharply, the Fed might not cut rates in 2025 at all.
