Lazard's chief market strategist Ronald Temple believes that the Federal Reserve will keep interest rates unchanged until 2025, contrary to many analysts' expectations of cuts.
Current Fed Policy Review
The Federal Reserve is expected to keep its benchmark interest rate unchanged at its upcoming meeting. The Fed faces a tough balancing act between inflation and economic growth, especially as the current administration's tariff policies are expected to both increase inflation and slow growth.
Inflation Risks and Tariffs
Temple cites inflation risks as the main reason for his forecast, expecting U.S. tariffs to expand and increase inflation through 2025. 'My view differs from the consensus because I expect U.S. tariffs to expand in scope and size through 2025 and increase inflation,' Temple stated.
Balancing Inflation and Economic Growth
Economists highlight the key question of whether Fed officials will ignore short-term inflation rises and continue with rate cuts or wait for clearer signs of temporary inflationary pressures. Diane Swonk, chief economist at KPMG, emphasizes the difficulties of this decision.
Ronald Temple confidently maintains his position that the Fed will not cut interest rates despite inflation risks. This stance contrasts with many in the financial community who hope for rate cuts.
