Institution: Still does not believe the Federal Reserve will cut interest rates this year, as persistent inflation remains a key issue

ChainCatcher news, SWBC Chief Investment Officer Chris Brigati stated that he remains skeptical about the Federal Reserve's interest rate cuts this year. The most likely scenario is that there will be only one rate cut this year, and the possibility of no cuts is even greater. The Federal Reserve maintains a high degree of consistency in its policy communication and exercises cautious patience in its decision-making process. This week, Trump will have the opportunity to appoint a new Federal Reserve governor, which will change the distribution of voting members within the Federal Reserve.

Brigati also mentioned that his core reason for being reserved about rate cuts is the persistent issue of inflation stickiness. The Federal Reserve has repeatedly emphasized its high concern regarding inflation stickiness. Although they had previously downplayed the impact of employment data, their recent attitude seems to have softened. However, unless more clear signs of deterioration in the labor market are observed, the extent of rate cuts will be very limited. Currently, the only limited indicator available is the latest non-farm payroll data, but what is truly concerning is that inflation may remain high or even worsen. If the Federal Reserve cuts rates while inflation remains elevated or rebounds, it will inevitably lead to a new policy dilemma.