The Fed’s mantra will continue to be: Patience.

Global investors are anticipating two Fed rate cuts this year, with more expected in 2026. Thats a reasonable forecastand consistent with my baselinebut I dont hold it with much confidence.

But it is increasingly likely that 2025 will be a wait-and-see year for the Fed.

?? Tariffs are high and rising. Inflation is already above the 2% target and is set to climb to ~4% by next spring.
?? Inflation expectations are at risk. Bond market measures are calm now, but may rise as actual inflation picks up.
?? Policy uncertainty isnt going away. Tariffs, immigration enforcement, fiscal policy, government shutdownstoo many unknowns.

Put it all together, and the #Fed seems likely to stay on the sidelines longer than markets expect.

Rate normalization will come. The federal funds rate will likely move toward 3%but that looks more like 2026, once inflation rolls over and it is clear the struggling economy needs help.