Looks like today's meeting is gonna be streamed on the Federal Reserve's YouTube Channel. If you’ve got a better link, drop it here.
There’s been some buzz about what Jerome Powell might say, and the consensus seems to be that he’ll keep the interest rates steady, just like they’ve been for the last six months. The last adjustment was back in December 2024 when he cut it by 25 basis points.
No changes again. The FED has left the same interest rates for the federal funds rate, and the markets have no reacted much to it since it was basically fully priced in. A cut would have pumped the market, since we are not seeing unemployment going up for now and I think that is being one of the key metrics for them to not cut. So im wondering if they are just going to wait for unemployment to go up, but at that point the recession is already there and there would be another 2001/2008 style event where they panic cut into a crash, and after that we go to the moon.
Donald Trump wants the Feds to cut interest rates but his actions are the major stumbling block. Jerome Powell just finished a press conference, and the reasons he gave for keeping rates steady are tariffs and the conflict in the Middle East (slightly significant). I am waiting for Trumps response to the decision to hold rates steady. The last time he called the Feds' head a stupid person and I think Powell is used to these insults. We would have to wait till September to expect a cut, especially if the US seals all its tariff deals and peace returns to the Middle East.
That's always been the situation. The Federal Reserve and their other Central Bank counterparts have always been late to pivot from tightening to monetary expansion NOT because they're stupid, BUT because they base everything on "the data", data with information THAT has already happened by the time it reached Jerome Powell's office.
But as long as there no rate cuts, then the current situation is "OK". The markets are slow and boring, but "OK".
Powell is once again late to the party. Seems he will wait for something to break before cutting rates. Why not tey to be ahead of the curve. He keeps saying tariffs cause inflation but inflation is down since Trump began his tariff crusade in March. Im not an economist but he is harming Americans by not lowering rates. There is still predicted to be two rate cuts this year, I hope he does one at the September FOMC.
From the news I've read around here, the Fed signaled two interest rate cuts still for this year, 2025, but with this war, I think it's unlikely, especially since the United States is considering getting involved. This war has been a disappointment for me. Just when it seemed like the economy was starting to recover, this happens. Sooner or later, it's going to affect our lives.
The Fed's hold on rates at 4.25 - 4.50 % was expected, & the market didn't move much, stock prices weren't set. Powell emphasized that Fed is playing a long game, waiting for real data (such as tax driven inflation or changes in unemployment) before taking any action
Yeah, no cuts make sense now with inflation holding & job still strong. But waiting for a recession could trigger late cycle panic cut, mirroring the 2001 or 2008 playbook
agreed, Powell seems reactive, not proactive. The expectation now is for two cuts this year, likely starting in september. Whether the Fed jumps in early or waits, markets are in for a cautious summer of data watching
Yeah that is the problem, information is reflexive, you act on it after it has happened, so your decisions have a lag with reality, but you would expect that they have (legal) insider information on things to take decisions with more accuracy, but they either are doing this on purpose to cause a recession or are just in the dark trying to guess the next move but they can't so they just put it all on the data. Powell was asked why he cut before the election and he said that it was because the inflation forecast was 2.5% and it was before the tariffs, so he had a good answer there to be honest. But he could also have argued against cuts by claiming "we still don't know what Trump's change in policy will do". You can always come up with a reason to cut or not to cut. The next quarter should reveal what's next.
Talks between the foreign ministers of the UK, France, Germany, and Iran are ongoing in Geneva. And Trump has given a two-week grace period before the US joins the war. I am hoping that some positive news will come out of these negotiations and meetings. The market might recover gradually if there is progress in the negotiations. Hopefully, a ceasefire deal will stabilize the oil price, which will be a big boost to the global economic market.
Since the US has signed multiple tariff deals with different nations, September might be when Fed Chair Jerome Powell considers cutting interest rates.
That's definitely VERY concerning because IF Jerome Powell announces a pivot to Quantitative Easing, THEN we definitely know that something in the economy is expected to BREAK, about to BREAK, OR it has already happened.
¯\_(ツ)_/¯
He will never get his "Soft Landing". Did anyone notice that he has already stopped using those words?
Yeah that has been my base case for a while. How do they expect to get a soft landing if they are waiting for the famous "data" to tell them when to cut, and they are waiting for basically for shit to hit the fan which is what has happened by the time you start seeing all the familiar symptoms of a recession like the spike on unemployment, nonfarm payrolls going down, etc. We already got credit, bankruptcies and so on, so we are only lacking these now. I think they are just waiting at this point and then cut. But the question is what happens after, since if they cut fast, you may reintroduce inflation fast as well.
It's not merely that, because these sorts of situations are very difficult to balance. When was the last time that the U.S. economy was saved because of a "soft landing". If they print too much cash like they've done during the COVID-19 Pandemic, then the consequences will be met. We're currently seeing how hard it is.
It's always the same situation.
Well an interesting situation now with the Iran bombing thing is that oil prices may go up, which means higher inflation across the board, as goods are moved through oil-powered motors, among other things. The implications of higher oil are one of the main reasons inflation would go up, and so you have Powell looking at the data, and now they have data that is reasonable to think about how inflation could rise, and this will give him leverage to continue flat, assuming they don't hike.
It's a very dangerous situation because we're going back to the Stagflation debate again. If the economy continues to slow down, and inflation goes up again, the Jerome Powell CAN'T pivot to Quantitative Easing to stimulate the economy, BUT can't tighten the monetary policy again to fight inflation too.
¯\_(ツ)_/¯
He'll continue to say that he will "refer to the data before making a decision", but he's probably just waiting for something to break.
Inflation numbers in June were higher year on year, and month on month, BUT it's still lower than expectations which sort of is bullish? July will be the month when everyone starts soft-panicking if those numbers go higher again. That would be the THIRD consecutive month of increase.
If at all possible Powell will decide for a hike in interest rates, it will probably happen in October OR November?
As far as I know, their next live broadcast at the Fomc will be on July 29-30, 2025, and here we will know the real situation that can affect the economy of every country in the world.
And many are waiting for this.
And besides that, I think it would be better to watch their live broadcast at this link source https://www.federalreserve.gov/live-broadcast.htm so that on the day of their live broadcast,
we will know the inflation rate that will happen.
I believe that, as usual, Jerome Powell will be very careful in what he will try to say during his press conference. 8n the past few months, some time after Q.E. he always says that his next decision will "depend on the data" and that he will not increase nor decrease the interest rate "for the time being".
Thanks. 👍
I am not sure if it will be "all countries in the world". Because, no matter what happens, it gets pretty normal after a while.
Like for example, 2008 caused crisis in Spain and Greece too, but now look at them, they are doing normal, there isn't some weird 100%+ inflation crisis that is ruining them, they are living a normal life.
So did the tariff stuff, it impacted the world market couple months ago when it was first talked about, but then it became normal and everyone started to see that as regular. This is why the best way to move forward would be understanding that whatever Americans do, it will be good for a while but then it will be normal.
What we need to arrange here however is to make sure that we are not going to end up with that much trouble, it will be very normal and it would be not a weird thing to handle.
Bump.
FOMC conclusion later, with Jerome Powell's decision with the interest rate, and it will be followed by a talk/speech, then a press conference.
It will definitely be another decision of NOT changing the interest rates, and an announcement that he will "wait for more data" before making a decision.
Is he already late from decreasing rates? There should be one by this time of the cycle, no?
Too late Powell refuses to cut rates again, Trump will be furious. Powell still basing his decisions on what could happen. Inflation is lower than when he cut 50bps last year to help Biden in the run up to the election. I am convinced that Powell is politically motivated with his policy, he despises Trump & wants to destroy his administration.