Economists warn that the Federal Reserve may not cut interest rates at all this year
The Federal Reserve paused rate cuts at its January meeting, with it still undecided when or if they will resume, especially as the market waits to see how Trump's second term tariff and immigration policies will develop. Daniel Doderer, an economist and research director at Flack Global Metals, said: "I think the Fed is in a very good position right now where it can do nothing for a while. We are transitioning from a labor market supply-demand balance to a market that may face supply constraints while demand remains unchanged or even higher, which suggests that the Fed is unlikely to cut rates. Therefore, our internal expectation is that the Fed will not cut rates this year. However, compared with the possibility of raising rates, there is slightly more chance of the Fed cutting rates."
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