Core Viewpoint - The Federal Reserve's recent decision to cut interest rates by 25 basis points reflects a cautious approach, avoiding dissent among members, and indicates a focus on future economic conditions, particularly in relation to the housing market [1][2][4]. Interest Rates and Monetary Policy - The Federal Reserve's current stance is to maintain a tight monetary policy, with discussions around the neutral rate being between 3% to 3.75% [3][4]. - Predictions suggest that the Fed funds rate could stabilize around 3% in the coming year, which is expected to significantly impact the housing market [5][4]. Housing Market Dynamics - Approximately 85% of mortgage holders currently have rates below 5.5%, which limits their willingness to move unless rates decrease significantly [5]. - The housing market is perceived to be "locked" until mortgage rates become more favorable, with a target rate of around 5.5% seen as necessary to stimulate movement [6][7]. Market Reactions and Future Outlook - The Russell 2000 index, which includes many small-cap stocks, is showing positive movement, indicating market optimism despite current bond yield levels [8]. - The market tends to price in future conditions, typically 6 to 8 months ahead, suggesting that current stock movements reflect anticipated economic changes [9]. Sector Performance - Sectors such as technology and consumer discretionary are expected to perform better with lower interest rates, as they are more sensitive to financing costs [10][11].

You always should give everybody a Ford, everybody the presumption of good faith in the same way that whenever somebody is in trial, in trial, they're innocent until proven guilty. So I can't read Scott Besson's minds. I don't know whether he is consciously spouting nonsense, consciously piling on to the Fed, Federal Reserve presidents and saying stuff that he knows isn't true.But what he's doing, ultimately, this is just not okay. There is a I dislike the word gaslighting, but the comment he made to our ow ...

Joining us now to react, Dan Clifton is head of policy research at Strategus, a bar company, and Claudia Sam is New Century Advisors chief economist. Welcome to you both. Claudia, let me just start with you from kind of the I was going to say egghehead, but that would be impolite from the the economics professions point of view on all of this.Um, but also, I mean, you've had some really thoughtful things say about what what is going on with the economy and inflation. What's your reaction to to Worsh's comme ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The FOMC is positioned to wait for more clarity on inflation and economic activity, with a careful approach to adjusting monetary policy due to elevated uncertainty [2][3] - Most participants believe that some reductions in the fed funds rate would likely be appropriate this year, with a median forecast of two cuts in 2025 [3][4] - The Fed staff's economic forecast indicates higher GDP growth through 2027 compared to previous forecasts, primarily due to trade policy announcements [4][8] Summary by Sections FOMC Meeting Minutes - Participants generally agreed on a wait-and-see approach regarding inflation and economic activity, noting that uncertainty had decreased since the May meeting [2] - A few participants suggested that tariffs might only lead to a one-time price increase, while most noted the risk of persistent inflation effects [4] Economic Forecasts - The Fed staff's forecast includes higher GDP growth through 2027 and a lower inflation projection than in May, with expectations for inflation to return to the 2% target by 2027 [8] - The staff anticipates that tariff increases will raise inflation this year and provide a small boost in 2026 [8] Communication Strategy - A preliminary discussion was held regarding potential changes to the Summary of Economic Projections and the addition of alternative scenarios to the FOMC's communications strategy [9]

Federal Reserve Policy & Interest Rates - The market is debating whether the Federal Reserve should cut interest rates by 25 basis points [5][6] - The current Fed funds rate is floating around 425 to 450 basis points, approximately 43% [2] - Some believe the Fed is too focused on past data and risks being late in responding to economic changes [4][6][10] - Cutting rates by 75 basis points occurred last year [5] Inflation & Economic Factors - Housing costs, a significant component of CPI and PPI, are impacted by the Fed's balance sheet reduction of $35 billion [3] - Tariffs' full effect on inflation is still uncertain [2][6] - The speaker believes inflation is moderating and not out of control [5][6] - The Personal Consumption Expenditures (PCE) at 31% is not a major concern [9] Bond Market & Treasury Yields - The 2-year Treasury note yield is around 4% [2] - The 10-year and 2-year Treasury yields are at the same level as in autumn 2022 [13] - The bond market and the Federal Reserve may not be aligned in their expectations [12]