Ethenea: Rate cut? Unlikely. Political pressure? High. And the Fed? Divided

Ethenea: Rate cut? Unlikely. Political pressure? High. And the Fed? Divided

28 juli 2025

Rente Fed

With the July FOMC meeting just around the corner, the market is only pricing in a 1% chance of a rate cut. Differing views among members on the current situation make an immediate cut unlikely – despite political pressure. September is now the month to watch for a possible reduction.

Key takeaways from market analysts and Fed officials:

  • A 'wait-and-see' approach is expected, given the strong labour market and inflation data.
  • Disagreements within the FOMC: Fed Governor Christopher Waller is calling for a rate cut in July, citing a weakening labour market and the effects of one-off tariffs. This highlights growing divisions within the Fed over the timing and necessity of rate adjustments.
  • What to watch for: Inflation and labor market data remain of utmost importance. Uncertainty around tariffs and potential political influence on Jerome Powell’s stance are also key factors for investors.

'Masterful inaction' perfectly captures the FOMC’s current stance, as policymakers are navigating mixed signals and internal disagreements. Investors should prepare for continued volatility, especially in the period leading up to the September meeting.

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