Seems that September will be the first cut. I think it’s too long, they should do it at the July meeting. Powell has his head stuck up his ass though, he keeps saying tariffs might increase inflation. He’s not supposed to predict what may happen. Delaying cuts is a big risk, we should get 2 cuts this year but Powell has been a problem.
Inflation is part of the Fed's mandate.
Cutting rates ahead of a massive inflation shock could be a big error.
Tariff won't be an inflationary one-off, but rather another spiral.
The problem with tariffs is that what should be a one-off event that creates a shock but then the market adjusts, it's something that becomes a permanent uncertainty because the tariffs are constantly changed and used as a negotiating tactic, so the market never adjusts and then they are just stuck trying to guess what's next, this increased risk makes people less prone to invest and thus stay in defensive positions. But the paradox is that at the same time, at some point the public stops reacting to these news because they no longer believe Trump will stick to them and will fumble if the market crashes a lot anyway, so they frontrun it.