The post There will be no interest rate cuts by the Federal Reserve this year appeared on BitcoinEthereumNews.com.

Forget about rate cuts this year. The Federal Reserve is not budging, no matter how much Wall Street begs for a break. Inflation is being stubborn, the labor market refuses to chill, and the government is racking up deficits like there’s no tomorrow. According to Bank of America, there’s no chance the Fed will cut rates in 2025. “Inflation is stuck above target,” said economist Stephen Juneau. “Activity is strong, and the labor market now appears to have stabilized.” This isn’t what anyone wanted to hear. Just a few months ago, Fed officials hinted at cutting rates by a full percentage point in 2025. By December, that was slashed in half. Inflation reports and a labor market that won’t quit This week, all eyes are on two Bureau of Labor Statistics reports. The producer price index (PPI) dropped on Tuesday, and it’s gonna be followed by the consumer price index (CPI) on Wednesday. Both will show just how sticky inflation still is. There has been a 0.3% monthly increase in December for PPI, with the core number (excluding food and energy) rising the same amount. November’s annual PPI rate hit 3%, while core inflation hit 3.5%—the highest numbers since February 2023. CPI isn’t looking much better. Forecasters expect a 0.3% bump in headline inflation and a 0.2% rise in core inflation for December. On a yearly basis, those numbers translate to 2.9% and 3.3%, respectively. The Federal Reserve wants inflation at 2%. These numbers scream, “Not happening.” Meanwhile, the labor market continues to complicate things. December’s nonfarm payroll report showed 256,000 new jobs added, and the unemployment rate dropped to 4.1%. The Fed’s dual mandate of stable prices and full employment is colliding, making it almost impossible to justify cutting rates. Juneau even suggested the Fed might go in the…

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Filed under: News - @ January 14, 2025 11:27 pm