Fed's Wait And See Stance Could Persist Through To September

2025-05-07 15:53:00 ET

Summary

• Another hold from the Federal Reserve with an acknowledgement that uncertainty has increased with more upside risk for both inflation and unemployment.
• This suggests little inclination to move until they are confident of the direction the data is heading.
• Rate cuts could be delayed, but risk being sharper when they come.

By James Knightley , Padhraic Garvey, CFA , & Francesco Pesole

Fed leaves rates unchanged, but highlights elevated uncertainty

The Federal Reserve has left monetary policy unchanged with the Fed funds target rate range remaining at 4.25-4.50%. It was a unanimous decision with the accompanying press release stating that the economy continues to "expand at a solid pace", labour market conditions remain "solid" while inflation "remains somewhat elevated". All this phraseology is the same as last time....

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