Washington, D.C., February 24, 2025 – Research released by the San Francisco Fed on Monday reveals that investors and economists expect the U.S. central bank to respond “strongly and systematically” to shifts in inflation and labor market conditions.
The analysis, which examined professional forecasts and bond market movements, indicates that market participants have grown increasingly sensitive to U.S. economic data - especially since 2022.
The study notes that although inflation began rising in 2021, the Fed did not initiate interest rate hikes until 2022. Similarly, deteriorating labor market data in mid-2022 spurred the Fed to reduce the policy rate by a full percentage point starting last September. Currently, the Fed’s target rate stands between 4.25% and 4.50%.
Recent economic indicators, including a survey showing business activity falling to a 17-month low, have bolstered market expectations of two quarter-percentage-point rate cuts later this year. Interest rate futures suggest that the first rate cut could come as early as June, with a second possible as early as October.
Analysts point out that concerns over slowing economic growth are now overshadowing fears of a resurgence in inflation, influencing the anticipated Fed policy moves. The findings underscore the central bank’s readiness to adjust monetary policy in response to evolving economic conditions, as financial markets continue to closely monitor U.S. economic data.
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U.S. stock markets finished mixed on Wednesday (28 January) as investors reacted calmly after the Federal Reserve left interest rates unchanged, a decision that had been widely expected and largely priced in.
U.S. industrial production rose by 0.1% in September, rebounding after a decline in August, while capacity utilisation remained unchanged, according to Federal Reserve data on Wednesday.
Broad market stocks experienced slight declines during the day, according to Alexander Morris, CEO and Chief Investment Officer of F/M Investments.
The Federal Reserve on Wednesday reduced its benchmark interest rate by a quarter point to a range of 4–4.25%, responding to slowing economic growth and persistently high inflation.
JD Vance arrived in Armenia on Monday (9 February), becoming the first sitting U.S. Vice President to visit the country, as Yerevan and Washington agreed to cooperate in the civil nuclear sector in a bid to deepen engagement in the South Caucasus.
The United States and Azerbaijan signed a strategic partnership in Baku on Tuesday (10 February) encompassing economic and security cooperation as Washington seeks to expand its influence in a region where Russia was once the main power broker.
Buckingham Palace said it is ready to support any police investigation into allegations that Prince Andrew shared confidential British trade documents with late sex offender Jeffrey Epstein, as King Charles expressed “profound concern” over the latest revelations.
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Türkiye experienced one of its most severe droughts in the past half century in 2025, with conditions now showing signs of becoming long-term and structural, climate expert Mikdat Kadioglu told Anadolu.
Türkiye’s national energy company, TPAO, has struck a new cooperation deal with U.S. energy giant Chevron, signing a memorandum of understanding to explore joint oil and gas exploration and production opportunities, the Turkish Energy and Natural Resources Ministry announced on Thursday.
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U.S. stock markets finished mixed on Wednesday (28 January) as investors reacted calmly after the Federal Reserve left interest rates unchanged, a decision that had been widely expected and largely priced in.
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