This follows from the Fed decision yesterday, which reflected a bit of an atypical dissent from a few policymakers.
This follows from the Fed decision yesterday, which reflected a bit of an atypical dissent from a few policymakers. Of note, Hammack, Kashkari and Logan were vocal about not wanting to stick with a more easing bias at this stage.
In case you missed it: FOMC decision: No change in rates as expected Besides that, it is also Powell’s last meeting as Fed chair but markets are not too convinced that Trump can bully his way into rate cuts in the months ahead. That especially since there is still no certainty of when the US-Iran conflict will end. With the Strait of Hormuz still closed, oil prices continue to ramp higher again this week.
Morgan Stanley had previously penciled in two 25 bps rate cuts by the Fed for September and December this year. However, they have now revised that call in expecting no rate changes by the Fed whatsoever until year-end. The firm cites still-elevated inflation and recent data pointing to economic resilience as their main reason for pivoting.