{"id":1534668,"date":"2025-05-07T18:00:00","date_gmt":"2025-05-07T22:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1534668"},"modified":"2025-05-07T18:00:00","modified_gmt":"2025-05-07T22:00:00","slug":"fed-rejects-trump-calls-to-cut-rates-warns-of-increased-stagflationary-uncertainty","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/fed-rejects-trump-calls-to-cut-rates-warns-of-increased-stagflationary-uncertainty\/1534668\/","title":{"rendered":"Fed Rejects Trump Calls To Cut Rates: Warns Of “Increased” Stagflationary “Uncertainty”"},"content":{"rendered":"

Fed Rejects Trump Calls To Cut Rates: Warns Of “Increased” Stagflationary “Uncertainty”<\/span><\/p>\n

\n

Since the last FOMC meeting, on March 19th, a great deal has happened – Liberation Day, bond market crisis, stock market crash, a tariff pause, stock market surge, sentiment slump but labor market and hard data surged… and trump has demanded rate-cuts… oh and China cut rates and flooded the zone with liquidity…<\/p>\n

China’s central bank cuts key rates, injects 1 trillion yuan 3 hours after agreeing to trade talks to prop up economy and give communist party ammo for negotiations.<\/p>\n

Tomorrow the Fed will do precisely none of that.<\/p>\n

\u2014 zerohedge (@zerohedge) May 7, 2025<\/a> <\/p>\n

Gold has been a dramatic outperformer since March, stocks are rather shockingly unchanged-ish (after collapsing on Liberation Day), Treasury yields are higher, while crude has collapsed…<\/p>\n

<\/a><\/p>\n

‘Soft’ data has collapsed since the last FOMC meeting while ‘hard’ data has improved…<\/p>\n

<\/a><\/p>\n

Should Powell be pre-emptively cutting.<\/strong>.. like he did when financial conditions tightened ahead of the election…<\/p>\n

<\/a><\/p>\n

The market is expecting only 3 cuts this year now (up from 2 cuts before the last FOMC)…<\/p>\n

<\/a><\/p>\n

…and nothing from The Fed today…<\/p>\n

<\/a><\/p>\n

And that’s what they got…<\/p>\n

*FED HOLDS BENCHMARK RATE IN 4.25%-4.5% TARGET RANGE<\/strong><\/p>\n

But risks have risen on both sides – raising the spectre of stagflation:<\/p>\n

“The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.<\/strong>“<\/em><\/p>\n

\u201cThe unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.\u201d<\/strong><\/em><\/p>\n

Uncertainty has risen:<\/p>\n

\u201cUncertainty about the economic outlook has increased further.\u201d<\/strong><\/p>\n

The new statement makes specific reference to trade – although not tariffs.<\/p>\n

\u201cAlthough swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.\u201d<\/em><\/strong><\/p>\n

Read the full redline here…<\/p>\n

<\/a><\/p>\n

And so all eyes and ears are now focus on what Powell says at the presser for Powell to explain the difference:<\/p>\n

Sept 2024<\/strong>: weak soft data, tight financial conditions, August market crash, cut rates by 50bps<\/strong><\/em><\/p>\n

May 2025<\/strong>: weak soft data, tight financial conditions, April market crash, pause<\/strong><\/em><\/p>\n

Oh, one more difference: Sept 2024: Democrat President; May 2025: Trump President<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 05\/07\/2025 – 14:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/fomc-27<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Fed Rejects Trump Calls To Cut Rates: Warns Of “Increased” Stagflationary “Uncertainty” Since the last FOMC meeting, on March 19th, a great deal has happened…<\/p>\n","protected":false},"author":0,"featured_media":1534669,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1534668","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1534668","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1534668"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1534668\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1534669"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1534668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1534668"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1534668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}