US Fed expected to pause rate cuts again, await clarity on tariffs

[BumRushDaShow]

Source: Yahoo! Finance/AFP

Sun, May 4, 2025 at 3:38 PM EDT


The US Federal Reserve is widely expected to extend a recent pause in rate cuts this week as it waits to see how President Donald Trump's stop-start tariff rollout affects the health of the world's largest economy.

Trump has imposed steep levies on China, and lower "baseline" levies of 10 percent on goods from most other countries, along with 25 percent duties on specific items like steel, automobiles and aluminum. The president has also paused higher duties on dozens of other trading partners until July to give them time to renegotiate existing arrangements with the United States.

Most economists expect the tariffs introduced since January to push up prices and cool economic growth -- at least in the short run -- potentially keeping the Fed on hold for longer.

"The Fed has to be very focused on maintaining inflation so that it doesn't start moving back up in a more persistent way," said Loretta Mester, who recently stepped down after a decade as president of the Cleveland Fed. "That would undermine all the work that was done over the last three years of getting inflation down," she told AFP.

Read more: https://finance.yahoo.com/news/us-fed-expected-pause-cuts-041758872.html

[Fiendish Thingy]

1. My guess is they will be hiking rates by fall. Nt

[Bernardo de La Paz]

2. I think they'll be dropping them in the fall. But there might be a hike in between

If inflation bumps up in the short run, they may hike. But I think that will be short-lived as trade contraction ripples out and interacts with spending contraction and labour market disruption. My best guess is that the second quarter will be down again and inflation will be up not much and the economic contraction will loom larger as a bigger threat.

I am not an economist.

[republianmushroom]

3. Smart

[usonian]

4. There NEVER will be clarity on tariffs.

Mousseolini is just waving his magic twanger trying to make other countries kiss his ring ass. They are standing firm. And he backs down when stood up to.

There is only one situation in which clarity will arise. When his entire crew of sycophants and deranged religious culties are tossed out. Preferably to the sharks.

And batteries.

[IronLionZion]

5. The volatility on tariff policy is enough to cause recession

which will force the fed to lower rates eventually.

Plenty of companies are waiting for clarity, which will never come. So they are pulling back on orders for some imports.

[C Moon]

6. Clarity?! Ha!

[Bengus81]

7. He'll be lowering them soon enough when we're in a massive recession

So yeah Trump...you'll get the lower interest rates you want,but NOT for the reason you want.