“Fed holds rates at 3.5%-3.75%. Powell sees tariff-driven inflation fading. Goldman expects two cuts later in 2026 if core PCE cools toward target.”, — write: www.fxempire.com
Two Dissents Wanted Another Cut Governors Stephen Miran and Christopher Waller both voted to cut again. Both Trump appointees, both got outvoted. Miran’s term ends Saturday, so that was probably his last meeting. Worth noting: Miran previously argued for a half-point cut but dialed it back to a quarter-point this time.
Powell: No Preset Course, But the Bar for Cuts Is High
“Monetary policy is not on a preset course,” Powell said. “We will make our decisions on a meeting-by-meeting basis.” Translation: they’re not committing to anything, and the data will have to force their hand.
The statement gave traders nothing to work with beyond the usual “we’ll watch the data” language. No signal the Fed’s ready to move soon. Futures are pricing maybe two cuts this year, none next. June’s the earliest window, but it’s not a sure thing unless inflation cools off.
The Forecast: Two Cuts This Year, But Only If Inflation Cooperates Here’s where the smart money is positioning. Goldman Sachs Asset Management sees the Fed on an extended pause near term, but expects easing to resume later this year.
Kay Haigh, global co-head of fixed income and liquidity solutions, laid it out: “We expect easing to resume later in the year as a moderation in inflation allows for two further ‘normalization’ cuts to take rates back to levels seen by the median FOMC member as neutral.”