Fed Denies Trump

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Developer pressure didn’t work:

‘In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage?backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”

Impacts?

“The Federal Reserve’s decision to maintain interest rates at 4.25%-4.50% on May 7, 2025, reflects a cautious approach amid economic uncertainty, particularly due to persistent inflation and the potential effects of President Trump’s tariff policies. This pause, widely anticipated by markets, signals the Fed’s reluctance to cut rates until clearer evidence emerges of inflation trending toward its 2% target or a weakening job market. The decision could sustain high borrowing costs, potentially straining lower- and middle-income households already facing rising credit card and auto loan delinquencies. Investors expecting stimulus through rate cuts may face muted or slightly negative market reactions, as the Fed prioritizes data-driven decisions over speculative policy shifts, with tariffs raising concerns about higher inflation and slower growth.

However, the Fed’s steady stance may stabilize certain sectors while creating challenges for others. Equity markets, which have shown resilience despite higher rates, could see continued volatility as investors reassess growth prospects without imminent rate relief. Bonds may attract more interest as investors seek safer returns amid economic uncertainty, potentially pushing up yields. The real estate sector, still grappling with high borrowing costs, might face prolonged pressure, particularly for commercial properties and homebuyers. Meanwhile, the Fed’s wait-and-see approach underscores its focus on balancing inflation control with employment goals, but risks frustration from policymakers like Trump, who advocate for cuts to counter tariff-induced economic drag. The next meeting in June 2025 is now eyed for potential rate adjustments, contingent on incoming economic data.  (And shit not blowing up in India, Iran, or Europe, adds the wizened old geezer…)

Blah, blah, blah…

Market held modest gains for the session, but let’s see what the Chair has to say in the next half-hour, or so…

Then let’s see how this rolls around the rattled world with tomorrow morning’s column.

Write when the fevers break,

George@Ure.net

10 thoughts on “Fed Denies Trump”

  2. Oh and let’s not forget that tariffs mean that the Corp PTB have to pay Your taxes [speaking from their perspective of course] LOL. So consider source and origins of the the tariff noise before we go all smoot halley and “it caused a depression”. Nerp, It was the Fed keeping interest rates at the choke point threshold for too long just as they are today…..

  5. just a charade . Hollywood moved to washington . nearly there . great actors and movie . bitcon bottomed similarily with the naz . they have no shame or economic capacity. just gold and gold stocks for me . we approach the superbull . i dont care what they or their market does . but vix looks good and 3x pro shorts. yep the beat goes on.

  7. Over here bananas jumped in value from $0.49/lb to $0.60/lb. Who didn’t see it coming?

    Those American fruit pickers Trump told us all about better get online soon.

  8. Around these parts over the last week bananas jumped in value from $0.49/lb to $0.60/lb. 22%.

    Those American fruit pickers Trump told us all about better get online soon.

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