Fed Slashes Balance Sheet by $15.7 Billion in Just 7 Days

— I expect 2 rate cuts in 2025.

— The main goal is a sustainable path to 2% inflation.

▪️ Bostic, Fed Chairman:

— Previously I expected two rate cuts, now only one.

— Inflation will remain unstable, with a return to the 2% target not expected before 2027.

— Uncertainty is the main factor complicating the Fed’s work.

— Trade tariffs could increase inflationary pressure.

— Inflation may remain above 2% longer than expected.

— The baseline scenario is a strong economy and reduced inflation.

— A longer-term high rate is possible due to trade tariffs.

— Small businesses are reticent in hiring and investing.

— The current monetary policy of the Federal Reserve is appropriate; a balanced approach is needed.

— Business confidence has been seriously undermined by tariffs, and the impact on the economy may be stronger than the trade duties themselves.

— An additional rate reduction is possible within 1–2 years.

— The next rate cut may take longer than expected.

— We need to wait and see how the economy behaves.

— The Fed’s policy remains restrictive, inflation is slowing.

— Consumers expect prices to rise due to Donald Trump’s trade policies.

📌 Market expectations ( #FED ):

– May 7: PAUSE.

– June 18: a decrease of 25 bps to 4.00-4.25%.

– July 30: PAUSE.

– September 17: a decrease of 25 bp to 3.75-4.00%.

– October 29: PAUSE.

– December 10: a decrease of 25 bps to 3.50-3.75%.

– January 28: PAUSE.