Maximum employment & stable prices were the choice of words from Jerome Powell last meeting addressing the economy.
While the headline Personal Consumption Expenditures (PCE) price index rose by 2.3% year-over-year in March 2025, the core PCE, which excludes food & energy, increased by 2.6%. Additionally the NY Fed's multivariate core trend suggests underlying inflation may be closer to 3.0%, indicating persistent inflationary pressures.
The April jobs report showed stronger than expected job growth, with unemployment remaining steady at 4.2%. This robust labor market reduces the urgency for immediate rate cuts.
Recent tariff implementations have contributed to rising inflation expectations, with a one year outlook projecting 6.5% inflation. This complicates the Fed's decision making, as cutting rates amid rising inflation expectations could undermine its credibility.
Now let's zoom out to June 2025 the probability of a rate cut at the June meeting has decreased to 37% following strong economic data.
My Chart gives a great outlook on rate cut possibilities and how we can take an overall outlook on the economy based on 10 yr Government Bond. I was able to add in a few important dates along with starting & ending points of rate cuts throughout those time frames. I did not include all the rate cuts in between. However, it can still serve as a great indicator moving forward. I hope this helps and let's hope for the best in our economy moving forward.
While the headline Personal Consumption Expenditures (PCE) price index rose by 2.3% year-over-year in March 2025, the core PCE, which excludes food & energy, increased by 2.6%. Additionally the NY Fed's multivariate core trend suggests underlying inflation may be closer to 3.0%, indicating persistent inflationary pressures.
The April jobs report showed stronger than expected job growth, with unemployment remaining steady at 4.2%. This robust labor market reduces the urgency for immediate rate cuts.
Recent tariff implementations have contributed to rising inflation expectations, with a one year outlook projecting 6.5% inflation. This complicates the Fed's decision making, as cutting rates amid rising inflation expectations could undermine its credibility.
Now let's zoom out to June 2025 the probability of a rate cut at the June meeting has decreased to 37% following strong economic data.
My Chart gives a great outlook on rate cut possibilities and how we can take an overall outlook on the economy based on 10 yr Government Bond. I was able to add in a few important dates along with starting & ending points of rate cuts throughout those time frames. I did not include all the rate cuts in between. However, it can still serve as a great indicator moving forward. I hope this helps and let's hope for the best in our economy moving forward.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.