American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Latest News

Rate cuts back on the table? Fed seen resuming easing in June after confidence plunge

by admin February 26, 2025
February 26, 2025
Rate cuts back on the table? Fed seen resuming easing in June after confidence plunge

Mounting economic uncertainty is fueling speculation that the Federal Reserve may be compelled to resume cutting interest rates sooner than previously anticipated.

Traders are increasingly betting on a June rate cut, potentially followed by another in September, as concerns grow over declining consumer confidence and rising inflation expectations.

The catalyst for this shift in market sentiment is a concerning report from The Conference Board Consumer Confidence Index, a widely-followed monthly survey of 5,000 US households.

The latest index, released Tuesday, revealed that US consumer confidence deteriorated at its sharpest pace in three and a half years during February.

This decline reflects growing anxiety among Americans about the potential economic impact of President Trump’s policies, particularly tariffs and potential disruptions to trade.

Adding to the complexity of the situation, the survey also showed that consumers’ average inflation expectations have surged to 6%, the highest level since May 2023.

This combination of declining confidence and rising inflation expectations presents a significant challenge for the Federal Reserve, which is tasked with maintaining both price stability and full employment.

The financial markets have reacted swiftly to this news.

Interest-rate futures contracts are now pricing in a greater than 70% chance that the Fed will reduce its policy rate by a quarter of a percentage point at its June meeting, bringing the target range down to 4.00%-4.25%.

A further rate cut in September is also increasingly priced in, indicating that traders expect the Fed to pursue a more aggressive easing cycle.

The Fed’s dilemma

This betting suggests that traders anticipate the central bank’s concerns about potential weakness in the labor market will outweigh worries about resurgent inflation by June, prompting a response with monetary policy easing.

However, Fed policymakers have stated, in recent meeting minutes and public remarks, that they are seeking more evidence that inflation is trending back down to their 2% target before they feel comfortable cutting rates.

They are closely monitoring the potential impact of President Trump’s planned tariffs, tax cuts, immigration crackdown, and ongoing reductions in the federal workforce on prices, economic growth, and the labor market.

The Bureau of Economic Analysis is expected to release the data, however a report on Friday is expected to show some small progress on the inflation front, with the year-over-year personal consumption price index that the Fed targets expected to have edged down to 2.5% in January from 2.6% in December.

The central bank faces a difficult task in navigating these competing economic forces.

While the labor market has remained relatively strong, with unemployment at 4% in February, recent surveys suggest that business activity is beginning to slow.

The Fed’s next moves will likely depend heavily on incoming data, as policymakers weigh the risks of both inflation and recession.

This scenario means they’re watching closely for sustained weakness in key economic indicators like consumer spending, manufacturing activity, and employment growth.

The post Rate cuts back on the table? Fed seen resuming easing in June after confidence plunge appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Ukraine reaches agreement with US on minerals deal
next post
Bitcoin’s post-Trump rally fizzles, crypto selloff intensifies below $90,000

Related Posts

Elon Musk vs. Mukesh Ambani: Who will dominate...

October 24, 2024

Israeli airstrikes on Syria’s Aleppo result in civilian...

March 30, 2024

Zelensky signs law overhauling Ukraine’s mobilization rules

April 18, 2024

Why are credits scores falling in America? WalletHub...

January 12, 2025

What Donald Trump’s presidency means for DJT’s future:...

December 30, 2024

Russia raises its flag in Avdiivka, then presses...

February 19, 2024

‘We cannot remain silent about what we saw.’...

July 27, 2024

Gold price outlook: can safe haven demand drive...

December 9, 2024

Eight Chinese migrants found dead on Mexico beach...

April 4, 2024

Who are the Houthis and why are they...

February 5, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved