Despite change atop the Fed, investor hopes for rate cuts hit hurdles
Investors had anticipated a more dovish Federal Reserve under incoming chair Kevin Warsh, but a divided Fed decision and rising inflation pressures from Middle East conflicts have clouded expectations for near-term rate cuts. The central bank held rates steady with an unusually high number of dissents, signaling resistance to automatic easing under the new leadership. Heightened energy prices and uncertainty over geopolitical risks have shifted market expectations, with rate cuts now largely ruled out for the remainder of the year.
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ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountInvestors are turning the page to a newly led U.S. Federal Reserve that has long been expected to have a more dovish bent, but instead faces a bumpier rates path ahead.The Fed meeting that concluded on Wednesday was set to be Jerome Powell’s last as the chair of the central bank, with Kevin Warsh on track to take over. Warsh was picked by U.S. President Donald Trump, who heavily favors rate cuts, but the divisions revealed in the Fed decision showed barriers to monetary easing.A move to lower rates over the past couple of years and the expected bias toward further easing have supported risk assets, but a more hawkish-than-anticipated rate path could become problematic for equities and many corners of the…
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