Federal Reserve Signals Caution Amid Rising Inflation Concerns

According to Odaily, the Federal Reserve has indicated a cautious approach towards further interest rate cuts due to persistent inflation. Investors are keenly observing the Federal Reserve's meeting minutes for insights on how long the current interest rates might be maintained. U.S. President Donald Trump's new fiscal policies, including deregulation, tax cuts, and potential stimulus measures, could stimulate economic growth, reducing the necessity for additional rate cuts. Additionally, tariffs and immigration policies may contribute to inflation in both the short and long term. BNP Paribas strategists noted that the Federal Reserve is comfortably awaiting clarity on the next policy steps. CME's FedWatch tool suggests a nearly 50% probability of a rate cut in June, which could be considered an aggressive expectation. Blake Gwinn, head of U.S. rates strategy at RBC Capital Markets, mentioned that the Federal Reserve might remain on hold for the rest of the year, but did not rule out the possibility of rate hikes if inflation resurges.