The U.S. Federal Reserve has decided not to lower interest rates in June and July 2023, despite growing market pressure and calls from President Donald Trump.
Federal Reserve Keeps Rates Steady
The Federal Reserve remains steadfast, keeping interest rates unchanged. Expectations for rate cuts were dampened after a joint statement from the U.S. and China expressing a desire to ease trade tensions.
Market Reacts to Changing Expectations
Traders who had been betting on three rate cuts this year adjusted their forecasts to just two cuts in 2025. The rise in two-year Treasury yields reflected growing market dissatisfaction with the Fed's inactions.
Trump's Disagreement and Economists' Forecasts
President Trump is calling for rate cuts despite economic data suggesting otherwise. Economists believe that lowering rates before inflation is under control could trigger further economic issues.
The Federal Reserve is exercising caution in its actions, reflecting the current state of inflation and the economy. Analysts remain skeptical about potential rate cuts in the near future.
