Financial markets are currently pricing in a significant and rapid cycle of interest rate cuts by the Federal Reserve starting as early as July, according to the CME data. However, this expectation stands in stark contrast with the prevailing short-term rate market data, which suggests a different trajectory.
What Happened: According to Bob Elliott, the chief investment officer at Unlimited Funds, the current economic indicators provide the Fed, under Chair Jerome Powell, ample justification to maintain its current stance, potentially leaving it to a future leader to initiate the much-anticipated easing cycle.
Elliott highlighted that the consistently stable unemployment rate remains a crucial factor guiding the Fed’s policy decisions. He further pointed out that with significantly slowing labor force growth due to current immigration restrictions, maintaining this stable unemployment rate will require considerably fewer than 100,000 new jobs per month.
Despite a recent weak GDP print, Elliott believes the Fed will likely look past this backward-looking data and focus on forward growth expectations, which are still projected to be around 1.5% for the year, implying over 2% growth for the remainder of 2025. “At that level the Fed has little urgency to cut,” he asserted.
He also suggests aggressive rate cuts are unlikely in the near term without a significant worsening of financial conditions.
Adding a political dimension, …
Full story available on Benzinga.com
Financial markets are currently pricing in a significant and rapid cycle of interest rate cuts by the Federal Reserve starting as early as July, according to the CME data. However, this expectation stands in stark contrast with the prevailing short-term rate market data, which suggests a different trajectory.
What Happened: According to Bob Elliott, the chief investment officer at Unlimited Funds, the current economic indicators provide the Fed, under Chair Jerome Powell, ample justification to maintain its current stance, potentially leaving it to a future leader to initiate the much-anticipated easing cycle.
Elliott highlighted that the consistently stable unemployment rate remains a crucial factor guiding the Fed’s policy decisions. He further pointed out that with significantly slowing labor force growth due to current immigration restrictions, maintaining this stable unemployment rate will require considerably fewer than 100,000 new jobs per month.
Despite a recent weak GDP print, Elliott believes the Fed will likely look past this backward-looking data and focus on forward growth expectations, which are still projected to be around 1.5% for the year, implying over 2% growth for the remainder of 2025. “At that level the Fed has little urgency to cut,” he asserted.
He also suggests aggressive rate cuts are unlikely in the near term without a significant worsening of financial conditions.
Adding a political dimension, …
Full story available on Benzinga.com
Financial markets are currently pricing in a significant and rapid cycle of interest rate cuts by the Federal Reserve starting as early as July, according to the CME data. However, this expectation stands in stark contrast with the prevailing short-term rate market data, which suggests a different trajectory.
What Happened: According to Bob Elliott, the chief investment officer at Unlimited Funds, the current economic indicators provide the Fed, under Chair Jerome Powell, ample justification to maintain its current stance, potentially leaving it to a future leader to initiate the much-anticipated easing cycle.
Elliott highlighted that the consistently stable unemployment rate remains a crucial factor guiding the Fed’s policy decisions. He further pointed out that with significantly slowing labor force growth due to current immigration restrictions, maintaining this stable unemployment rate will require considerably fewer than 100,000 new jobs per month.
Despite a recent weak GDP print, Elliott believes the Fed will likely look past this backward-looking data and focus on forward growth expectations, which are still projected to be around 1.5% for the year, implying over 2% growth for the remainder of 2025. “At that level the Fed has little urgency to cut,” he asserted.
He also suggests aggressive rate cuts are unlikely in the near term without a significant worsening of financial conditions.
Adding a political dimension, …Full story available on Benzinga.com Read MoreBob Elliott, CME, Federal Reserve, GDP, interest rate, Jerome Powell, jobs, News, QQQ, Rate Cuts, SPY, Unemployment, Economics, Federal Reserve, Markets, SPY, US78462F1030, QQQ, US73935A1043, News, Economics, Federal Reserve, Markets, Benzinga Markets
