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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The Federal Reserve is widely expected to keep interest rates unchanged at Wednesday’s meeting.
A 61-year-old man in Alaska rescued after being trapped facedown under a massive 700-pound boulder in a freezing glacier-fed creek for three hours.
Two foreign nationals were indicted Friday in California and Wisconsin for allegedly trying to smuggle sensitive U.S. military technology to China and target an American dissident critical of Beijing.
The Federal Aviation Administration has ordered an accident investigation into SpaceX’s latest Starship test flight, which ended with the spacecraft spinning out of control and breaking apart over the Indian Ocean.
Czech Justice Minister Pavel Blažek resigned Friday after opposition parties called for his removal over a controversy involving bitcoins donated to the Ministry of Justice.
The United Nations is ordering over 60 offices and agencies to submit plans to cut 20% of their staff by mid-June as part of a wide reform effort to address a serious budget gap.
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On May 28, the inauguration ceremony of Lachin International Airport was held.
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A 61-year-old man in Alaska rescued after being trapped facedown under a massive 700-pound boulder in a freezing glacier-fed creek for three hours.
Two foreign nationals were indicted Friday in California and Wisconsin for allegedly trying to smuggle sensitive U.S. military technology to China and target an American dissident critical of Beijing.
The Federal Aviation Administration has ordered an accident investigation into SpaceX’s latest Starship test flight, which ended with the spacecraft spinning out of control and breaking apart over the Indian Ocean.
Czech Justice Minister Pavel Blažek resigned Friday after opposition parties called for his removal over a controversy involving bitcoins donated to the Ministry of Justice.
The United Nations is ordering over 60 offices and agencies to submit plans to cut 20% of their staff by mid-June as part of a wide reform effort to address a serious budget gap.
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