Fed Holds Rates Firm & Talks About Jobs and Inflation
What’s Cooking at the Fed?
The Federal Reserve last‑night decided to keep interest rates on the same track.
That might seem routine, but the tone was anything but mellow—think hawks on a hot summer day.
They pointed to the U.S. labor market as a solid muscle and warned that inflation could do a sprint if tariffs take full effect.
Why the Hawkish Stand?
- Robust Jobs Market: Continued high employment levels keep the economy pulsing.
- Inflation Risks: Tariffs, supply hiccups and a quick rebound in demand could lift price pressures.
- Trade Calendar: With the August deadline looming, smaller tariff‑inflation fears have eased a bit.
Growth Gaps & What Tesla? (Because it’s 2025, “Tesla” is just a punchline)
Economic output fell below last year’s pace during the first half of 2025, but still showed a surprise bounce.
However, overall growth isslowing and inflation may edge higher as tariffs settle in.
What’s Our Take?
Given the numbers, we still think the Fed might loosen rates once by year‑end, but if growth shrinks more or inflation softens dramatically… another cut? Could be on the horizon.
Thanks for reading—stay tuned for fresh updates!
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