US Pulse: The Bar for Rate Cuts Has Risen

The ANZ research team reports that the Fed has adopted a more hawkish stance following Chair Warsh's first meeting, postponing rate cut expectations to mid-2027. Future policy decisions will be strictly data-dependent as the FOMC monitors energy price shocks and their potential secondary effects.

Key Takeaways

• 1.The Fed is prioritizing inflation control, leading to a push back of expected rate cuts to mid-2027.
• 2.FOMC members are split on the necessity of further rate hikes this year, with a higher bar for any potential cuts.
• 3.Forward guidance has been suspended in favor of a data-dependent, fact-based communication approach under Chair Warsh.

Table of Contents

• Data ahead of FOMC
• The week ahead
• The week that was
• Implications of Warsh's first FOMC meeting
• Focus on Fed speakers
• Data pulse: the week ahead
• Data pulse: the week that was

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