The Chairman of the Federal Reserve, Jerome Powell, made clear the elements that could influence monetary policy and markets this year:
Possible rate reduction: Powell indicated that the Fed could start cutting rates in September, but this will depend on how the labor market and the economy evolve overall.
Expectation of up to 2 more cuts: The market is already pricing in the possibility of two additional rate cuts during 2025.
GDP and consumption deceleration: Economic growth has decreased significantly, and consumer spending has cooled, reinforcing the need to consider more flexible measures.
Limited impact of tariffs: Although tariffs could pressure prices, the effect on inflation is limited by the risks of weakness in employment.
Attention to risks: Powell emphasized that the Fed will continue to closely monitor the economy and adjust policy as risks change, prioritizing labor stability and controlled inflation.
