But not all experts are seeing a long pause<\/strong> to Fed rate cuts despite inflation, war and labor-market concerns.<\/p>\n Economists at BNP Paribas said in a note that \u201cOur base case is for the Fed to remain on hold into 2027. That said, we see a growing tail risk that policymakers could consider hiking as soon as June <\/strong>if the Strait of Hormuz stays closed and U.S. labor data remains resilient,” reported The Business Times. <\/p>\n Meanwhile Eric Diton, president & managing director at The Wealth Alliance, told TheStreet that while the Fed remains committed to bringing inflation back to its 2% goal, it \u201cmust balance this with a labor market where the majority (80%) of jobs added in the past three years have been disproportionate from education and healthcare.\u201d\u00a0<\/p>\n Diton cited recent Blackrock research.\u00a0<\/p>\n \u201cHowever, sectors that employ a large share of white-collar and tech-adjacent workers have seen slower growth, opening the door to a potential rate cut later this year <\/strong>if the unemployment rate were to rise,\u2019\u2019 Diton said. \u00a0\u00a0<\/p>\n Traders at the CME Group FedWatch Tool are pricing in the next time the Federal Open Market Committee will cut benchmark interest rates as late 2027, almost four quarters later than what was expected at the beginning of this year.\u00a0<\/p>\n More Federal Reserve:<\/strong><\/p>\n There\u2019s a 100% probability the FOMC will hold rates steady at its April 29 meeting, according to the FedWatch Tool.<\/p>\n The FOMC voted 11-1 March 18 to hold the benchmark Federal Funds Rate at 3.50% to 3.75%.<\/strong><\/p>\n It was the FOMC\u2019s second pause after cutting rates by 75 basis points<\/strong> during its last three meetings of 2025 due to a weakening labor market.<\/p>\n The Fed\u2019s dual congressional mandate is to ensure the U.S. economy is in balance with maximum employment and stable prices.<\/strong><\/p>\n Billionaire investor Ray Dalio, the founder of Bridgewater Associates, told CNBC this week that the U.S. economy has devolved into stagflation,<\/strong> and the \u201cwait-and-see approach\u201d of the Fed is appropriate at least for the next several meetings to protect the economy from sliding into further risk.<\/p>\n Stagflation is a rare and challenging economic phenomenon characterized by the simultaneous occurrence of stagnant economic growth, high inflation and high unemployment.<\/p>\n Related: Incoming Fed Chair Warsh’s rate cut path is on a collision course with White House<\/strong><\/p>\n Even before the outbreak of the eight-week Iran War, the Fed faced a dilemma from worrisome risks to both sides of its congressional mandate: unemployment rates and sticky inflation from tariffs.<\/p>\n Several Wall Street firms say inflation will now be closer to 3% this year than the Fed\u2019s 2% target,<\/strong> eating into disposable incomes and keeping a lid on hiring.<\/p>\n That\u2019s a shift<\/strong> from what was supposed to be a strong year in 2026 as the inflationary shock of President Donald Trump\u2019s tariffs faded and stimulus from tax cuts kicked in.\u00a0<\/p>\n As I reported, Federal Reserve Governor Michael Barr said that while he was “hopeful” inflation falls this year, that ?might not happen with higher oil prices spiking gasoline\u00a0 and other consumer costs,<\/strong> mirroring increasing concerns from Main Street to Wall Street about the Fed\u2019s interest-rate outlook due to recessionary and inflationary uncertainty.<\/p>\n \u201cMoreover, the conflict in the Middle East raises additional risks. <\/strong>Higher oil prices tend to pass through pretty quickly to gasoline prices, and higher gasoline prices can be particularly painful for low- and moderate-income families,\u2019\u2019 Barr said in prepared remarks.<\/p>\n The April FOMC meeting is presumed to beJerome Powell\u2019s last as Fed Chair.\u00a0<\/p>\n Former Fed Governor Kevin Warsh, President Donald Trump\u2019s nominee to replace him, is expected to be approved by the Senate Banking Committee April 29.\u00a0<\/p>\n The full GOP-led Senate is expected to approve Warsh by May 15 when Powell\u2019s term as Fed Chair ends. Warsh has long been advocating a \u201cregime change\u201d at the central bank, including lower interest rates.<\/p>\n Trump has been demanding throughout his first and second administrations that Powell slash interest rates by 1% or less.<\/strong><\/p>\n Cetera CIO Gene Goldman said in his latest weekly commentary that the \u201cFed remains effectively constrained by sticky inflation limits near-term cuts, while geopolitical volatility continues to cloud the growth outlook<\/strong>.\u2019\u2019<\/p>\n \u201cAgainst that backdrop, even subtle shifts in tone from Powell could be read as setting the table for June under new leadership<\/strong>,\u201d Goldman added.<\/p>\n Related: Markets reset Fed rate-cut bets as DOJ drops Powell probe<\/strong><\/p>\n #Debates #Fed #rate #cuts #surprise<\/p>\n","protected":false},"excerpt":{"rendered":" Even if the now eight-week-old Iran War ends soon, some economists and analysts say the damage it\u2019s already done will keep the U.S. economy on a narrow footing. And that… <\/p>\n","protected":false},"author":1,"featured_media":774,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[999,998,674,126,1000],"class_list":["post-773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-cuts","tag-debates","tag-fed","tag-rate","tag-surprise"],"_links":{"self":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=773"}],"version-history":[{"count":0,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/media\/774"}],"wp:attachment":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}April FOMC meeting expected to hold rates steady<\/strong><\/h2>\n
\n
![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAyOTQwMjAy\/thestreet_effective-federal-funds-rate_41326.jpg?io=1&profile=rss\")
<\/p>\n<\/figure>\nFed\u2019s dual mandate requires a balance of jobs, prices<\/strong><\/h2>\n
\n
Stagflation concerns rise with latest inflation, jobs and GDP rates<\/strong><\/h2>\n
\n
Fed faces challenges to both sides of its mandate<\/strong><\/h2>\n
Iran War\u2019s impact on Fed\u2019s inflation concerns<\/strong><\/h2>\n
FOMC meeting expected to be Powell\u2019s last as Fed Chair<\/strong><\/h2>\n