🚨 The Fed is struggling to escape the pressure of holding interest rates high for too long.

✨After three rate cuts in 2024, the Fed has held the interest rate at 4.25–4.50% since December due to concerns about inflation and risks from Trump's tariffs. The market no longer expects the Fed to cut rates significantly this summer. There is over a 90% chance that the Fed will keep the interest rate unchanged at the July meeting.

Surveys from Reuters, WSJ, and Bloomberg all indicate that September will be a turning point:
- Up to 55% of experts forecast a rate cut in Q3 ( around month 9), while the remaining possibility is a delay until Q4 or the end of the year.
- The core CPI in May was very low and is likely to remain below 2.7% for the rest of 2025.

👉The Fed is "trying" to maintain high interest rates even though inflation is cooling down. The current interest rate in the U.S. is still about 0.5-1.5 bps higher than the "neutral" level - which is the interest rate that keeps economic growth, inflation, and unemployment stable.

The 🇺🇸 Fed has nearly reached one side of the "dual mandate," but now officials will need to pay attention to the labor market.