Fed says rate cuts still possible for the US economy – The when and how amid tariffs?
The post Fed says rate cuts still possible for the US economy – The when and how amid tariffs? appeared on BitcoinEthereumNews.com.
Several Federal Reserve officials this week said that interest rate cuts are still a possibility, but tariffs and market volatility would make any immediate policy changes unreasonable. The two Federal Open Market Committee (FOMC) meetings in 2025 have yielded no borrowing rate cuts this year, and analysts say the upcoming one in May won’t see a cut either. Chicago Federal Reserve President Austan Goolsbee told reporters that the Fed is employing a “wait-and-see” approach during a Thursday conference at the Economic Club of New York. Goolsbee argued that economic conditions remain too fluid to warrant quick changes in monetary policy. “I don’t think you should ever take anything off the table. That’s increases, cuts, or holding the same,” Goolsbee told reporters. “But the circumstances now suggest we need to wait and see how these things are getting resolved.” Fed unsure what to do with tariffs affecting market state The central concern, according to Goolsbee, is the unpredictability birthed by US trade policy, especially the increase in import prices. President Donald Trump may have lifted tariffs, but many remain in place, with the effective tariff rate estimated to have surged from 2.6% to as high as 26% this year. Goolsbee noted that such trade actions could trigger a “stagflationary shock,” where the Federal Reserve will have to tussle with inflation with slow economic growth, conditions that monetary policy is poorly equipped to handle. Still, Goolsbee mentioned that the US bond market is a relief for the central bank, citing a successful 10-year Treasury auction as a sign of continued investor trust. “When there is a flight to safety, it still feels like the safest asset in the world is a long-term Treasury,” he reckoned. Some financial markets have increasingly priced in expectation of rate cuts, but the central bank is seemingly…
Filed under: News - @ April 11, 2025 10:23 am