US Fed to Resume Easing Monetary Policy by June, Says Jefferies ‘Greed & Fear’ Report

The US Federal Reserve is likely to ease monetary policy rates by June, Jefferies said in its latest ‘Greed and Fear’ report, with a rider that though the rate cut could be earlier if the data and market action are bad enough.

“Money markets are currently expecting 64 basis points of rate cuts this year, Jefferies said in its report this week.

In the latest monetary policy meeting this week, the US central bank kept unchanged the key interest rate at 4.25-4.50 per cent, on expected lines.

US Fed noted that it will carefully assess incoming data, the evolving outlook, and the balance of risks before adjusting the interest rate.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.

Uncertainty around the economic outlook has increased, US Fed had noted. The Committee said it was attentive to the risks to both sides of its dual mandate (managing inflation and maintaining economic growth).

What Did Fed Say?

“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” Fed had said.

Affects Trump’s Tariff Policy

There have been apprehensions among the policymakers that Trump tariffs may translate into persistently higher inflation in the US. They have indicated that their future course of action will take into account Trump’s various policies, including the imposition of tariffs on various countries.

Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasizing that the United States will match tariffs imposed by other countries to ensure fair trade.

(With Inputs From ANI)

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