{"id":1542472,"date":"2025-06-18T18:00:00","date_gmt":"2025-06-18T22:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1542472"},"modified":"2025-06-18T18:00:00","modified_gmt":"2025-06-18T22:00:00","slug":"stupid-powell-does-not-cut-rates-as-expected-despite-diminished-uncertainty-worse-stagflation","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/stupid-powell-does-not-cut-rates-as-expected-despite-diminished-uncertainty-worse-stagflation\/1542472\/","title":{"rendered":"“Stupid” Powell Does Not Cut Rates (As Expected) Despite ‘Diminished Uncertainty’, Worse Stagflation"},"content":{"rendered":"

“Stupid” Powell Does Not Cut Rates (As Expected) Despite ‘Diminished Uncertainty’, Worse Stagflation<\/span><\/p>\n

\n

Tl;dr<\/strong>: The Fed held rates flat<\/strong> as expected, which will likely upset Trump even more, amid growing fear of stagflation.<\/strong><\/p>\n

The Fed did not shift its view of (median) rate-cut expectations for 2025 despite calling for higher unemployment, higher inflation, and weaker growth.<\/p>\n

But, the distribution of outcomes for 2025 shifted hawkishly… with seven policy members seeing no cuts in 2025 (up from 4)<\/strong><\/p>\n

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

*\u00a0 *\u00a0 *<\/p>\n

“We have a stupid person, frankly, at the Fed, he probably won’t cut today,” <\/strong><\/em>Trump said, hours before the Fed decision urging Powell to cut rates by 2.5 percentage points.<\/a><\/p>\n

\u201cI call him \u2018Too Late Powell\u2019 because he\u2019s always too late,\u201d<\/em><\/p>\n

\u201cWhat is wrong with Too Late Powell? <\/strong>Not fair to America, which is ready to blossom? Just let it all happen, it will be a beautiful thing!\u201d<\/em><\/p>\n

President Trump on Fed Chair Powell: “We have a stupid person, frankly, at the Fed. He probably won’t cut today…Maybe I should go to the Fed. Am I allowed to appoint myself at the Fed?” pic.twitter.com\/65hq3w47CF<\/a><\/p>\n

\u2014 unusual_whales (@unusual_whales) June 18, 2025<\/a><\/p>\n

Well he’s too-late-er now<\/strong> as The Fed decided, as expected, to hold rates flat for yet another month<\/strong>.<\/p>\n

Trump wasn’t alone as Chris Whalen remarked<\/a>:<\/p>\n

“We need more courage in this country. The Fed is the most cowardly, despicable institution I’ve ever worked for.”<\/strong><\/em><\/p>\n

*\u00a0 *\u00a0 *<\/p>\n

Since the last FOMC meeting on May 7th, a lot has happened both macro-economically and geopolitically<\/strong>. Global trade policy uncertainty has tumbled but geopolitical uncertainty has soared…<\/p>\n

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

Source: Bloomberg<\/p>\n

This has sent crude oil prices soaring as the dollar ad bonds lost ground. Gold is flat while stocks are up significantly…<\/p>\n

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

Source: Bloomberg<\/p>\n

‘Hard’ data has started to turn down <\/strong>(as ‘soft’ data reverted higher)…<\/p>\n

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

Source: Bloomberg<\/p>\n

Just a reminder…<\/p>\n

Some more “facts”: the last time US data was this weak the Fed cut 50bps https:\/\/t.co\/JkpqnlhFm3<\/a> pic.twitter.com\/7GJOqr93RC<\/a><\/p>\n

\u2014 zerohedge (@zerohedge) June 18, 2025<\/a><\/p>\n

But, rate-cut expectations for 2025 have tumbled since the last FOMC meeting (though 2026 expectations are up modestly)<\/p>\n

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

Source: Bloomberg<\/p>\n

So, while no one expects The Fed to cut rates today, all eyes will be on the DOTS, the economic projections, and what Powell says (whether he will tilt hawkish)<\/p>\n

Rate Decision – No Change but ‘Diminished Uncertainty’<\/h2>\n

As 100% expected, The Fed chose to leave the key Fed Funds rate unchanged:\u00a0<\/p>\n

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

*FED: UNCERTAINTY ABOUT OUTLOOK HAS DIMINISHED<\/strong>, STILL ELEVATED<\/p>\n

The DOTS shifted Dovishly<\/h2>\n

Heading into the statement, the market was more dovish than The Fed for 2025 <\/strong>and more hawkish than The Fed for 2027 (in line in 2026)…<\/p>\n

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

Source: Bloomberg<\/p>\n

While median 2025 rate cut expectations are the same…<\/strong><\/p>\n

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

…they see more cuts in 2026 and 2027 than previously.<\/strong><\/p>\n

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

7 Fed officials see no rate cuts at all in 2025 (up from 4 prior)<\/p>\n

2 Fed officials see 1 rate cut (down from 4)<\/p>\n

8 Fed officials see 2 rate cuts (down from 9)<\/p>\n

2 Fed officials see 3 rate cuts (same)<\/p>\n

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

The Fed’s economic projections move more stagflationary<\/h2>\n

*FOMC MEDIAN 2025 GDP PROJECTION FALLS <\/strong>TO 1.4% FROM 1.7%<\/p>\n

*FOMC MEDIAN 2025 PCE INFLATION RISES<\/strong> TO 3%, CORE RISES TO 3.1%<\/p>\n

*FOMC MEDIAN 2025 UNEMPLOYMENT PROJECTION TICKS UP<\/strong> TO 4.5%<\/p>\n

So, The Fed sees worsening unemployment than at the last meeting, worse inflation to come, and worse economic growth…\u00a0<\/p>\n

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

BUT, amid all the tariff derangement anxiety by the Fed, the worst they can come up with is core PCE rising to 3.1%<\/strong> by December (from 2.5% now) before tumbling<\/strong> to 2.4% in 2026 and 2.1%in 2027<\/p>\n

As Bloomberg’s\u00a0Catarina Saraiva noted:<\/p>\n

“The inflation forecast of 3% for this year is pretty remarkable given where prices are now. <\/strong><\/em><\/p>\n

We\u2019re at 2.1% in the headline PCE, so that would be a substantial reigniting of price pressures. <\/em><\/p>\n

On the surface, it\u2019s hard to square that forecast with two rate cuts,<\/strong> but clearly Fed officials see it as quite temporary, with inflation dropping back to 2.4% next year and then 2.1% in 2027.”<\/em><\/p>\n

We tend to agree with StanChart’s Steve Englander who noted that “the FOMC\u2019s objective at this meeting as expanding the range of possible policy responses while committing to none.\u00a0“<\/strong><\/em><\/p>\n

Read the full red-line below:<\/p>\n

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

Tyler Durden<\/a><\/span>
\nWed, 06\/18\/2025 – 14:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/stupid-powell-does-not-cut-rates-expected<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

“Stupid” Powell Does Not Cut Rates (As Expected) Despite ‘Diminished Uncertainty’, Worse Stagflation Tl;dr: The Fed held rates flat as expected, which will likely upset…<\/p>\n","protected":false},"author":0,"featured_media":1542473,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1542472","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\/1542472","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=1542472"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1542472\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1542473"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1542472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1542472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1542472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}