The Fed is in no hurry with rates: the balance is decreasing, tariffs are pressuring forecasts
Over the week, the Fed's balance decreased by $2.6 billion, but the tough rhetoric remains.
Regional branch heads are betting on patience — inflation is still above target, and tariffs create new uncertainty.
📌 Key signals:
— Harmack: no reason to hurry, the impact of tariffs is already being felt
— Collins: inflation by the end of the year — up to 3%, growth and hiring will slow down
— Logan: the monetary policy remains tight, but the rate may be lowered in a weak labor market
— Williams: 2% inflation — only by 2027, the economy slows to 1% growth
— Waller: ready to support a cut in July if the data allows
— Goolsbee: tariffs hinder reduction, but a series of positive CPIs could change everything
📊 The futures market is pricing in:
— July 30: Pause
— September 17: -25 b.p.
— October 29: Pause
— December 10: -25 b.p.
— March 18, 2026: -25 b.p.
Current stance — patience amid tariffs. Rate cuts are possible, but they will be gradual and only with confidence in a sustained decline in inflation.
Over the week, the Fed's balance decreased by $2.6 billion, but the tough rhetoric remains.
Regional branch heads are betting on patience — inflation is still above target, and tariffs create new uncertainty.
📌 Key signals:
— Harmack: no reason to hurry, the impact of tariffs is already being felt
— Collins: inflation by the end of the year — up to 3%, growth and hiring will slow down
— Logan: the monetary policy remains tight, but the rate may be lowered in a weak labor market
— Williams: 2% inflation — only by 2027, the economy slows to 1% growth
— Waller: ready to support a cut in July if the data allows
— Goolsbee: tariffs hinder reduction, but a series of positive CPIs could change everything
📊 The futures market is pricing in:
— July 30: Pause
— September 17: -25 b.p.
— October 29: Pause
— December 10: -25 b.p.
— March 18, 2026: -25 b.p.
Current stance — patience amid tariffs. Rate cuts are possible, but they will be gradual and only with confidence in a sustained decline in inflation.