Fed Meeting Validates Our Bullish Rate View

2025-03-22 01:55:00 ET

Summary

• The Fed kept rates steady and indicated that they were on hold but data dependent.
• Fed Chair Powell did recognize that inflation readings driven by higher tariffs should be ignored when setting monetary policy.
• We continue to forecast that the Fed will be forced to lower rates at least 3 times this year as the recession in the old economy in response to ultra-tight monetary supply continues to reduce economic growth.

The Fed kept rates steady and indicated that they were on hold but data dependent. Many investors thought the reduction in QT was dovish, but it is simply a technical issue that results in a simpler Fed balance sheet without huge reverse repo or repo balances....

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