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Institutions: Still Doubtful Fed Will Cut Rates This Year, Inflation Stickiness Remains Key Issue
Summary: According to SWBC Chief Investment Officer Chris Brigati, he remains skeptical about the Fed cutting rates this year. The most likely scenario is only one rate cut this year, with an even greater possibility of zero cuts. The Fed is maintaining a high level of consistency in policy communication and exercising cautious patience in the ...
According to SWBC Chief Investment Officer Chris Brigati, he remains skeptical about the Fed cutting rates this year. The most likely scenario is only one rate cut this year, with an even greater possibility of zero cuts. The Fed is maintaining a high level of consistency in policy communication and exercising cautious patience in the decision-making process. Trump will have the opportunity to appoint new Fed governors this week, which could change the distribution of voting members within the Fed.
Brigati also stated that the core reason for his reserved attitude towards rate cuts is still the persistent issue of inflation stickiness. The Fed has repeatedly emphasized its high level of concern regarding inflation stickiness. Although they have downplayed the impact of employment data in the past, their recent attitude seems to have softened. However, unless more clear signs of deterioration in the labor market are seen, the extent of rate cuts will be very limited. Currently, the only limited indicator available is the latest non-farm payroll data, but the real concern is that inflation may remain high or even worsen. If the Fed cuts rates when inflation remains high or rises, it will inevitably lead to new policy dilemmas.
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Link: Institutions: Still Doubtful Fed Will Cut Rates This Year, Inflation Stickiness Remains Key Issue [Copy]
